Which of the Following Terms Best Describes a Credit Commitment

question 16

Multiple Choice

Which of the following terms best describes a credit commitment for a specific time period which a company can use as needed?

• A)a term loan
• B)a revolving line of credit
• C)a syndicated bank loan
• D)a private placement
• E)an asset-backed line of credit

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Definitions:

Estimated Uncollectible

The anticipated portion of receivables that a company expects not to collect.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate years.

Open Account

A credit arrangement where goods or services are provided to a customer with the understanding that the customer will pay the supplier at a later date.

Note Written

A formally documented obligation in which one party promises to pay another party a predetermined sum of money at a specified date.