Mason Corporation borrows funds for the expansion of its business.The loan is secured with the office building.Therefore,the office building serves as _____ for the loan.
A)a liability
B)a collateral
C)a debt
D)an insurance
E)a corporate deposit

Question

Quizplus · Accepted Answer

Collateral refers to property or assets that are pledged as security for a loan. In this case, the office building is serving as collateral for the loan, meaning that it can be seized or sold by the lender if Mason Corporation defaults on the loan.

Mason Corporation Borrows Funds for the Expansion of Its Business