Rose's Gift Shop borrows money on a short-term basis by pledging its inventory as collateral. This is an example of a(n):

Question

Quizplus · Accepted Answer

The scenario describes an inventory loan, which is a loan where inventory is pledged as collateral. A debenture is a long-term debt instrument, a line of credit is a pre-approved loan amount that a borrower can draw from when needed, a banker's acceptance is a short-term credit investment created by a non-financial firm and guaranteed by a bank, and a working loan is a general term for a loan used to finance ongoing operations.

Rose's Gift Shop Borrows Money on a Short-Term Basis by Pledging