The Maximum Amount of Credit You Are Allowed by a Creditor

question 107

Multiple Choice

The maximum amount of credit you are allowed by a creditor is called a(n)

• A)revolving credit.
• B)installment cash credit.
• C)convenience credit.
• D)line of credit.
• E)single lump-sum credit.

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Definitions:

Stockholders' Equity

Represents the residual interest in the assets of an entity after deducting liabilities, essentially the net worth attributable to shareholders.

Stock Dividend

Distribution of additional shares of a company's stock to its shareholders instead of cash.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares.

Retained Earnings

The portion of net income that is retained by a company rather than distributed to its shareholders as dividends.