The Unused Portion of a Line of Credit

question 119

Multiple Choice

The unused portion of a line of credit:

• A)Is reported as a current liability in the balance sheet.
• B)Decreases a company's liquidity.
• C)Can be used at any time by drawing a check on a special bank account.
• D)Requires a compensating balance in order to keep the line of credit open.

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Definitions:

Federal Trade Commission

The Federal Trade Commission is a U.S. federal agency tasked with protecting consumers and ensuring a strong competitive market by preventing unfair, deceptive, or anticompetitive business practices.

Anti-Trust Enforcement

Government actions aimed at preventing or breaking up monopolies and other forms of market dominance that restrict competition.

False And Deceptive Advertising

Misleading or untrue promotional activities aimed at influencing the buying behavior of consumers.

Mergers

The combination of two or more companies into a single corporate entity, with the goal of achieving efficiencies, market expansion, or enhanced competitiveness.