What is credit ? How can it be an asset as well as debt trap ?
Answers
Answer:
Explanation:A CREDIT CAN BE BOTH ASSET AS WELL AS A DEBT TRAP: CREDIT CAN HELP YOU TO BUY THINGS LIKE PVC PIPES,FERTILIZERS ETC. IT CAN BE A DEBT TRAP IF YOUR NOT ABLE TO PAY THEN RECOVERY IS VERY DIFFICULT .
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Answer:
credit refers to an agreement in which the lender supplies the borrower with money ,goods ,or services in return for the promise of future payment .
credit as an asset - during the festival season ,a shoe manufacturer Rohan has received an order of making shoes in bulk ,within a month's time .To complete production,he hired extra workers and has to purchase the raw materials .he asks the supplier to supply leather now and promise to pay him later Then he took some advance payment from the trader ,by the end of the month ,he is able to deliver the order ,make a good profit and repay .