When a loan agreement contains actions for a borrowing company to comply with,such as supplying financial statements,these are called:
A) accounting ratios.
B) negative covenants.
C) positive covenants.
D) loan options.

Question

Quizplus · Accepted Answer

Actions for a borrowing company to comply with, such as supplying financial statements, are called positive covenants. Negative covenants, on the other hand, prohibit certain actions by the borrowing company, while accounting ratios are financial metrics used to assess a company's performance. Loan options refer to the terms and conditions of the loan, such as interest rate and repayment schedule, that the borrower can choose from.

When a Loan Agreement Contains Actions for a Borrowing Company