Question

A temporary financial arrangement under which, the borrower is allowed to borrow money upto the requirements of the borrower is called ....

• A. overdraft facility
• B. cash credit limit
• C. line of credit
• D. short-term loan

Answer 1

Answer:

B. cash credit limit

Cash Credit:

• Cash credit is a temporary financial arrangement under which the borrower is allowed to borrow money upto requirements of the borrower called cash credit limit.

• Interest will be charged only on the amount actually drawn.

• Current Liability : Previous Year turnover