Where a manufacturer does not collect money from wholesalers in exchange for goods produced is referred to as?

A. charge account
B. trading checks
C. trade credit
D. I owe you

Correct Answer:

Option C – trade credit

Explanation

Trade credit is the credit extended to you by suppliers who let you buy now and pay later. Any time you take delivery of materials, equipment or other valuables without paying cash on the spot, you’re using trade credit.