BF Chapter 9 Review

Front

Almost all business-to-business sales involve some form of credit.

Back

true

Front

The agreement between borrower and lender regarding the interest rate and time period of the loan is called the credit terms.

Back

true

Front

Businesses cannot legally evaluate credit applicants to determine whether they are a good credit risk.

Back

false

Front

Capacity is often considered to be the most important of the 4 C’s of Customer Credit.

Back

true

Front

The less frequently interest is compounded, the more expensive the loan.

Back

false

Front

The steps a business follows to keep customer credit payments up to date are called collection procedures.

Back

true

Front

The business extending credit is called the

Back

creditor

Front

Which of the following is considered a cost that a business incurs for offering credit?
Options:
business has reduced inventory and cost of storage,
business will possibly collect more money for the sale due to interest,
business does not have immediate use of the money,
all of these

Back

business does not have immediate use of the money

Front

In this type of credit plan, the company administers the credit program and assumes all risks and returns.

Back

self-managed credit plan

Front

Which of the following is NOT one of the “4 C’s of Customer Credit”? character, collateral, control, conditions

Back

control