Barclay financed the purchase of inventory from suppliers by borrowing money from his company's bank.A condition of the loan was the requirement for Barclay to provide monthly financial statements to the bank's manager.What is the condition called?
A) company liability
B) loan negotiation
C) promissory note
D) loan covenant

Question

Quizplus · Accepted Answer

The condition described in the scenario is known as a loan covenant. A loan covenant is a condition that a borrower must meet in order to receive and maintain a loan. In this case, the covenant requires Barclay to provide monthly financial statements to the bank as a way to ensure that the borrowed money is being used appropriately and that the business remains financially stable.

Barclay Financed the Purchase of Inventory from Suppliers by Borrowing