Legal Dictionary of Pakistan

revolving credit

A consumer-credit arrangement that allows the borrower to buy goods or secure loans on a continuing basis as long as the outstanding balance does not exceed a specified limit. - Also termed open credit; revolving charge account. Cf. revolver loan under LOAN. 5. LETTER OF CREDIT <the bank issued a credit in favor of the exporter>. 6. A deduction from an amount due; an accounting entry reflecting an addition to revenue or net worth < confirm that the credit was properly applied to my account>. Cf DEBIT. 7. TAX CREDIT <the $500 credit reduced his income-tax liability by $500 > . accumulated-earnings credit. Tax. A deduction allowed in arriving at a corporation's accumulated taxable income. & It offsets the base on which the tax is assessed by reducing the taxable base by the greater of $250,000 or the accumulated earnings retained for the reasonable needs of the corporation, reduced by the net capital gain. IRC (26 USCA) § 535. See accumulated-earnings tax under TAX.