After Much Searching, Mort Located an Old Banking Friend of His

question 127

Multiple Choice

After much searching, Mort located an old banking friend of his father's. The banker offered Mort up to $25,000 in unsecured funds, which Mort's firm could borrow any time within a year, as long as the bank has the money available. Mort was offered a(n)

• A) revolving credit agreement.
• B) asset guarantee pledge.
• C) pledging agreement.
• D) line of credit.

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Definitions:

Repossessed Inventory

Goods taken back by a seller or lender from the buyer, typically due to failure to make required payments.

Accounts Receivable

Money owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Persuasive Evidence

Documentation or information that is sufficiently reliable and convincing to influence a person's beliefs or decisions, often mentioned in the context of sales and revenue recognition.

Revenue Recognition

The accounting principle that dictates the specific conditions under which revenue is recognized and recorded.