What Is a Compensating Balance

question 4

Multiple Choice

What is a compensating balance?

• A)reclassification of a cash amount that is restricted from use in the current operating cycle
• B)negative cash balance that occurs when a company writes a check in an amount that exceeds the account balance
• C)short-term liquid investment with original maturity of three months or less
• D)minimum cash balance required to be maintained by a credit agreement

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Definitions:

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The process of recognizing the requirements of a business and finding ways to solve its issues.

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The process of bringing a new product to the market, from idea generation to commercialization.

Patent

A form of intellectual property that grants the holder exclusive rights to an invention, preventing others from making, using, or selling the invention without permission.

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Evaluations conducted to ensure that a product, service, or environment is free from dangerous or harmful effects to its users or occupants.