Final answer:
The statement that trade credit is entered in the buyer's books as an account receivable is false; it is recorded as an account payable.
Step-by-step explanation:
The statement is false. Trade credit is indeed credit extended to the buyer by the seller, but it is entered in the buyer's books as an account payable, not an account receivable. Accounts receivable are used to record money that others owe to the company, while accounts payable represent the money that the company owes to others, typically for goods or services received but not yet paid for.
When dealing with credit, it's important to understand its implications on financial records. Obtaining goods and services on credit means incurring debt that must be repaid in the future. For instance, using a credit card involves a short-term loan from the credit card company to the user, which is repaid at the end of a billing cycle.