1. A revolving credit agreement is:

		created because of recurring short-term liabilities such as wages and taxes that change spontaneously with operations.
		the credit created when one firm buys on credit from another firm.
		an outright sale of receivables.
		an unsecured, short-term promissory note issued by large, financially sound firms to raise funds.
		a formal, committed arrangement in which a bank agrees to lend up to a specified maximum amount of funds during a designated period.