Answer (D) is correct . Trade credit is a spontaneous source of financing because it arises automatically as part of the purchase transaction.
Answer (A) is incorrect because It occurs as a result of transactions apart from purchase transactions. In other words, such credit is arranged separately from the transactions to acquire the assets being financed.
Answer (B) is incorrect because It occurs as a result of transactions apart from purchase transactions. In other words, such credit is arranged separately from the transactions to acquire the assets being financed.
Answer (C) is incorrect because Prepaid interest is not a source of financing.
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