Description of table L.225 - Trade Credit

Trade credit and trade debt are accounts receivable and payable arising from the sale of business-related goods and services. The nonfinancial business sectors are both the largest borrowers and lenders of trade credit. Transactions by the government sectors are also significant in this instrument category. The government sectors extend trade credit in the form of prepayments to business firms for items not yet delivered. Trade payables of the sector for households and nonprofit organizations are only attributable to nonprofit organizations; balances on retail charge accounts are considered consumer credit (included on tables F.222 and L.222).

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