Multiple Choice
Products or raw materials a business keeps on hand to do business are referred to as:
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1. Introduction to Accounting
Types of Accounting
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Which of the following best describes what a package loan includes?
A
A loan that covers only intangible assets
B
Only the personal property being financed
C
Both real property and personal property financed together under a single loan agreement
D
Only the real property being financed
Verified step by step guidance1
Understand the concept of a package loan: A package loan is a type of loan that includes financing for both real property (e.g., land, buildings) and personal property (e.g., furniture, appliances) under a single loan agreement.
Analyze the options provided in the question to determine which one aligns with the definition of a package loan.
Option 1: 'A loan that covers only intangible assets' - This does not match the definition of a package loan, as intangible assets are not typically included.
Option 2: 'Only the personal property being financed' - This is incorrect because a package loan includes both real and personal property, not just personal property.
Option 3: 'Both real property and personal property financed together under a single loan agreement' - This matches the definition of a package loan and is the correct answer.
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