Abstract: Based on systematically exploring the transaction costs and risk, as well as the effect on the firm’s operations of trade credit mode, such as accounts payable, notes payable and prepayments, this paper empirically study on the relationship between financial report quality and trade credit mode choice of firm. The results show that high quality financial report can significantly increase the availability of accounts payable and notes payable, reduce the use of prepayments. through comparing and analyzing, this paper has confirmed that the effect of high quality financial report on the trade credit mode choice of firm is much stronger in private-controlled companies.