answersLogoWhite

0


Best Answer

Well, trade credit would be credit extended by suppliers (I guess). So, if in fact it is the largest source of short term credit, it would be because it is easier to get credit from people that want to sell you something than from someone that lends money (the potential profit warrants the risk).

User Avatar

Wiki User

14y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: Why is trade credit generally the largest source of short term credit for small firms?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Continue Learning about Accounting

Discuss the relative use of credit between large and small firms Which group is generally in the net creditor position and why?

Larger firms tend to be in a net creditor position because they have the financial resources to be suppliers to credit. The smaller firm must look to the larger manufacturer or wholesaler to help carry the firm's financing requirements.


What are the big four accounting firms?

The largest firms are commonly referred to as "The Big Four." These four firms are: Deloitte and Touche, Ernst and Young, KPMG, and PricewaterhouseCoopers.


What are credit card processors used for?

Credit card processors are firms or businesses who enable firms,shops and businesses of all kinds to accept secure credit card transactions safely.These processors then transfer the accepted, authorized payments from the customer to their accounts then onwards to the sellers own account and have become more and more important as the percentage of all payments transacted by cards has risen sharply in recent years.


Why a company issue a debit note or credit note?

The debit note is an asset it comes to the firms in the result of providing services and get a promise to settle this amounts later. The firms issues debit note for: 1- facilitate and increased sales 2- competitions. 3- to get new customer. The credit note is a liabilities the firm should be payed. The firm issued credit note for several reasons: a- to finance activities b- for tax purposes witch's , the firm will pay less tax when he borrow from out side.


Why is the quick ratio a more refined measure of liquidy than the current ratio?

Because inentories are generally the least liquid of the firms current assets

Related questions

What is generally the largest source of short term credit small firms?

Trade Credit


Where can one get car insurance if one has bad credit?

Bad credit will generally mean that car insurance cannot be purchased on a monthly pament plan. Although some firms will give this option they will charge higher fees. Most firms will still sell you insurance.


What is the importance of credit in your economy?

Credit enables the individuals and firms to purchase the important inputs for the production. Generally one businessman has not sufficient amount for the business. So credit is very useful for the business.


Why is small business firms could not easily source funds?

why small business firms could not easily source for needed funds


Discuss the relative use of credit between large and small firms Which group is generally in the net creditor position and why?

Larger firms tend to be in a net creditor position because they have the financial resources to be suppliers to credit. The smaller firm must look to the larger manufacturer or wholesaler to help carry the firm's financing requirements.


How can one check their credit rating from home?

There are a number of firms in the UK that allow you to check your credit rating from home. Firms such as Experian, Checkmyfile and Equifax offer online services that show your credit report. As at May 2013, many of these firms offer a free 30 day trial of their services.


A primary reason firms sell on credit is?

A primary reason firms sell on credit is to maintain their clients and also to move their stocks. These is one of the strategies of releasing revenue by an organization.


What is the largest investment for many firms?

legal advice


What are the big four accounting firms?

The largest firms are commonly referred to as "The Big Four." These four firms are: Deloitte and Touche, Ernst and Young, KPMG, and PricewaterhouseCoopers.


How do firms benefit from credit purchases?

They can charge extra money for the credit and encourage consumers to spend more.


What is the one largest professional services firms in the world?

Kpmg


What are the largest investment-banking firms?

JPMorgan, Goldman Sachs, Bank of America Merrill Lynch, Morgan Stanley, JM Financial, Citigroup, Barclays Investment Bank, Credit Suisse, Deutsche Bank