Which of the Following Financing Methods Provides a Float Period

question 81

Multiple Choice

Which of the following financing methods provides a float period?

• A)installment loan
• B)lump-sum loan
• C)credit card
• D)home equity line of credit
• E)a loan from a relative

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Definitions:

Prepaid Insurance

An asset account that reflects the amount paid for insurance policies in advance, before the coverage period.

Insurance Expense

This refers to the costs incurred by a business or individual as a result of purchasing insurance to protect against risks.

Unexpired Insurance

The portion of an insurance premium that has not yet expired or been used and is considered a prepaid expense.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life.