Which one of the following best describes a line of credit?

Question

Quizplus · Accepted Answer

A line of credit is a prearranged form of financing from a bank, typically short-term and revolving, that can be either committed (meaning the bank is obligated to lend up to a certain amount) or noncommitted (meaning the bank has the option to lend up to a certain amount). It can be used for various purposes, such as managing cash flow or financing short-term working capital needs. It is not a long-term loan, nor is it necessarily secured by accounts receivable or inventory.

Which One of the Following Best Describes a Line of Credit