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 business$$s 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 $.$

Vanags Assemblers Corporation is a manufacturing company. Vanags has been paying sales commissions to its salespeople on a quarterly basis. The vice president of sales has proposed that the policy be changed so that the sales staff is paid on a monthly basis. The company$$s financial managers have been asked to review the proposal. Which type of short$-$term financing will be affected by this policy change?

Bank loans

Commercial paper

Accruals

Trade credit