To buy a small business, Chelsea signs a written contract that states

QUESTION

To buy a small business, Chelsea signs a written contract that states that she agrees to pay the seller $50,000 within three years. What is she offering?

A) a promissory note
B) collateral
C) terms of trade
D) debt financing
E) commercial paper

ANSWER

Answer: A
Explanation: A) Trade credit can take different forms, but one of the most familiar is the promissory note, a written contract prepared by the buyer, who agrees to pay the seller a certain amount by a certain time.