A firm negotiates a(n)______with its bank so the firm will have access to a specified amount of unsecured short-term funds,provided the bank has the funds available.
A)capital drawing agreement
B)asset drawing account
C)line of credit
D)reserve account

Question

Quizplus · Accepted Answer

A line of credit is an agreement between a firm and its bank that allows the firm to access a specified amount of unsecured short-term funds, provided the bank has the funds available. A capital drawing agreement and an asset drawing account are not commonly used terms in banking. A reserve account typically refers to a fund that a company sets aside for a specific purpose, such as to cover bad debts or to invest in long-term projects.

A Firm Negotiates A(n)______with Its Bank So the Firm Will