For Most Businesses, Particularly Smaller Ones, the Most Common Way

question 26

Multiple Choice

For most businesses, particularly smaller ones, the most common way to cover a short-term financing need is to apply at a bank for which of the following?

• A) Commercial loan
• B) Line of credit
• C) Asset-based loan
• D) Inventory loan

---

Definitions:

Prepaid Interest

Interest that is paid in advance of the period to which it applies, often relating to mortgage or loan agreements.

Worksheet

An informal accounting document used internally to assemble, adjust, and sort various account balances for the preparation of financial statements.

Trial Balance

A bookkeeping report that lists the balances of all ledgers accounts in order to check the mathematical accuracy of the accounts' balances.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments have been made for errors, accruals, and deferrals in the accounting period.