Taylor Supply has made an agreement with its bank that allows it to borrow up to $10,000 at any time over the next year. This arrangement is called a(n):

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The described arrangement is a line of credit, as it allows Taylor Supply to borrow money up to a certain limit at any time during a specified period (in this case, over the next year). A floor loan typically has a fixed interest rate and is used to finance a specific asset or project. An open loan does not have a specific term or repayment schedule. Compensating balances require a borrower to keep a certain amount of money in a bank account as collateral for the loan. A bank note is a promissory note issued by a bank.

Taylor Supply Has Made an Agreement with Its Bank That