CREDIT & COLLECTION: PRELIM & MIDTERM EXAM

The following are important elements of credit except:

(2 POINTS)

• Equal Cost

• Legal Aspect

• Timing

Both businesses and consumers must be aware of applicable state and federal laws. (2 POINTS)

• True

• False

This can be accomplished by pledging an asset, providing a personal, corporate or bank guarantee or entering into a security agreement. (2 POINTS)

(a)  

Credit in its broadest sense is based on the components of :

(2 POINTS)

• trust, risk, economic exchange and futurity

• trust and confidence

• All of the above

Management competency, litigation and the company’s strategic direction are additional sources of risk. (2 POINTS)

• True

• False

No known derogatory record.

(2 POINTS)

• Credibility

• Character

• Capacity

• Condition

Regular government employee.

(2 POINTS)

• Capacity

• Collateral

• Character

• Capital

Mentally and physically healthy.

(2 POINTS)

• Condition

• Capital

• Character

• Collateral

Pledge 3,000 square meters of commercial land.

(2 POINTS)

• Collateral

• Capital

• Character

• Condition

Fire, explosion, terrorist attack, etc.

(2 POINTS)

• Natural and man-made disaster.

• Catastrophic events

• Calamities