Operating line of credit borrowings usually
A) are credited to a note payable account.
B) are reported as a non-current liability.
C) are debited to the cash account and result in a current liability.
D) are required by all companies.

Question

Quizplus · Accepted Answer

Operating line of credit borrowings are typically debited to the cash account when the funds are received, reflecting an increase in the company's cash resources. This transaction also creates a current liability, as these types of borrowings are usually expected to be repaid within a short period, such as within one year, making them a current liability on the balance sheet.

Operating Line of Credit Borrowings Usually