Question

distinguish between short term and long term credit​

Answer 1

Answer:

Generally, short-term credit is defined as a bank loan with a maturity of less than a year, while long-term credit is a loan repayable beyond a year without a provision for rollover.

Explanation:

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Answer 2

Short-term and long-term credit differs mainly in the time for which these are borrowed.

Explanation:

1. Short-term credit refers to the form of credit which is borrowed for a shorter duration.
2. The short-term credit is generally borrowed for financing the regular needs of a firm such as payment of wages, payment of bills, etc.
3. Long-term credit refers to the credit which is borrowed for a longer duration.
4. Long-term credit is generally used for financing heavy activities such as borrowing machinery, borrowing land, etc.