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Short-term credit, or short-term financing, is any lability that is scheduled for repayment within one year. Sources of short-term funds include banks, suppliers, securities firms,

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Short-term credit, or short-term financing, is any lability that is scheduled for repayment within one year. Sources of short-term funds include banks, suppliers, securities firms, and insurance companies. The obligations are in the form of bank loans, trade credit, commercial papec, secured loans, and accruals. Some types of short-term financing are easier to obtain and manage than others. Financial managers will consider the costs of the various sources of financing as part of a cash management strategy. The foliowing statement refers to a source of short-term credit. Select the best term to complete the sentence. The credit that is created when a supplier seils goods and services on an account with extended payment terms is called. Smith Enterprises is a large manufacturing company. Smith 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 campany's financial managers have been asked to review the proposal. Which type of short-term financing will be affected by this policy change? Trade credit Bankloans Accruals Commercial paper

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