A guaranteed line of credit in which a bank makes a binding commitment to provide a business with funds up to a specified credit limit at any time during the term of the agreement. Which of the following describes these arrangements?
A) revolving credit agreement
B) trade credit
C) short-term bank loan
D) commercial paper

Question

Quizplus · Accepted Answer

A revolving credit agreement is a type of loan that is extended to borrowers for a specified period of time. The borrower can draw down the funds whenever required, up to the specified credit limit, and can repay and re-borrow as needed. This type of arrangement provides flexibility to the borrower and is commonly used for ongoing operational expenses.

A Guaranteed Line of Credit in Which a Bank Makes