To efficiently manage its working capital, DM Pharma Inc. has a business arrangement with the suppliers of its raw materials, packaging material, and machinery. These suppliers allow DM Pharma Inc. to take possession of the required goods and services and pay for them later or in installments. In this scenario, DM Pharma Inc. has obtained funding in the form of?

Trade credit.

Question

Business

Madison Cole

20 August, 10:28

To efficiently manage its working capital, DM Pharma Inc. has a business arrangement with the suppliers of its raw materials, packaging material, and machinery. These suppliers allow DM Pharma Inc. to take possession of the required goods and services and pay for them later or in installments. In this scenario, DM Pharma Inc. has obtained funding in the form of?

Trade credit.

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Answers (1)

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Landen Branch · Answer 1

Trade credit

Explanation:

The trade credit is a business term which is use to purchase the product and services on immediately basis and the payment is made on a later date. It does not involved any cash transactions during delivery of material or products

So as per the question, the Suppliers enable DM Pharma Inc. to take possession of and pay for the necessary products and services at a later date or in installments which reflect the use of trade credit.