10. Sources of short-term financing Short-term credit, or short-term financing, is any liability that is scheduled for repayment within one year. Among the sources of short-term funds are banks, suppliers, securities firms, and insurance companies. Their securities (or obligations) can take the form of bank loans, trade credit, commercial paper, and accruals. Some types of short-term financing are easier to obtain and manage than others. Financial managers should consider the costs of the various sources of financing as part of a businesss cash management strategy. The following statement refers to a source of short-term credit.

Select the best term to complete the following sentence:

When resources are used and the payment for those resources is delayed, the result is the spontaneous creation of short-term .

A. Accural

B. Trade Credit

C. Bank Loans

D. Commercial Paper

Popov Assemblers Corporation is a manufacturing company. Popovs new CFO is reviewing the companys payment policy with the accounting staff. She has learned that Popov has not taken advantage of discounts in the past, and it typically pays its suppliers 30 days after the invoice date. The CFO has instructed the accounting staff to take advantage of all discounts and to stretch payments to those suppliers that do not offer discounts to 45 days. What type of financing is this?

A. Bank loans

B. Accrual

C. Trade credit

D. Commercial paper