Indicate whether each of the following statements about lines of credit is true or false.________ a) Line-of-credit agreements generally involve a fluctuating rate of interest.________ b) A line-of-credit agreement allows a company to borrow on an as-needed basis.________ c) Interest rates on line-of-credit agreements are often pegged to the consumer price index.________ d) The signing of a line-of-credit agreement is an asset source transaction.________ e) The expense recognition for the payment of monthly interest is an asset exchange transaction.
What will be an ideal response?
a) T b) T c) F d) F e) F
a) This is true. Interest rates fluctuate and are applied independently to each withdrawal from a line of credit.
b) This is true. A line of credit is a flexible way for a company to borrow cash as needed.
c) This is false. Interest rates are often pegged to the prime rate, not to the consumer price index.
d) This is false. The signing of a line-of-credit agreement does not require recording of a transaction. A transaction is only recorded when the line of credit is utilized.
e) This is false. Paying interest on a line of credit is an asset use transaction that decreases assets (cash) and decreases equity (interest expense).
You might also like to view...
Private parties cannot intervene in public antitrust actions brought by the government
Indicate whether the statement is true or false
What is anticipation inventory and what are the benefits and drawbacks of having it?
What will be an ideal response?
The creative services department of an agency analyzes, selects, and contracts for space or time in the media that will be used to deliver the client's advertising message.
Answer the following statement true (T) or false (F)
Britney, a manager in an advertising firm, was assigned a team and asked to come up with ideas for an advertising campaign. Britney briefed her team and outlined the purpose of the meeting clearly, after which she asked the members to individually generate ideas and bring their list to the next meeting. In the second meeting, the ideas were compiled, doubts clarified, and ideas built-on, after which the members were then asked to individually rank the ideas and submit the list to Britney, who tabulated the scores and created a list of the five highest rated ideas. Britney used ________ to generate the ideas.
A. cross-training B. nominal group technique C. conflict management D. positional rotation E. cognitive bias