The provision in short-term credit agreements that require customers to be out of debt for 30 to 45 days each year is referred to as a:
A)loan payoff requirement.
B)clean-up requirement.
C)debt free period requirement.
D)solvency period requirement.

Question

Quizplus · Accepted Answer

The provision in short-term credit agreements that require customers to be out of debt for a certain period of time each year is known as a clean-up requirement. This is meant to ensure that customers do not become too reliant on short-term credit and are able to manage their debts effectively.

The Provision in Short-Term Credit Agreements That Require Customers to Be