Question

explain the merits and demerits of trade credit​

Answer 1

Explanation:

Advantage :

A customer will buy more of a supplier's products if they don't have to pay cash immediately for their purchases. The most common credit term offered by sellers is payment within 30 days. Rarely do you see credit terms extended beyond this time.

Disadvantage:

Extending credit creates more outstanding accounts receivable, and someone needs to monitor these customers to make sure that they are paying on time. A company that is making its sales in cash does not have this problem.