Question

Sun Ltd. is a well known manufacture of sanitary fittings. Recently the
company was short of funds for meeting its day to day expenses. So, the
company approached one of its supplier to grant 60 days credit on purchase of
raw material. On the basis of creditworthiness of sun Ltd. the supplier granted
the credit. Identify the source of finance highlighted in the given case. Also.
explain its two merits.​

Answer 1

Explanation:

The source of finance highlighted in given cases is Trade credit.

Advantages are as followed

1. Readily available- The source of finance can be easily available.

2. Flexible- There is no rigid rile and regulations involved