WorksheetsAAT level 4 DM
Total questions: 20
Worksheet time: 15mins
What is a key element of credit policy documents related to customer assessment?
Credit Terms
Customer Credit Assessment
Debt Collection Procedures
Reporting
Which of the following is a shortcoming of credit ratings?
Frequent Updates
Comprehensive Data
Over-reliance on History
Objective Analysis
What ratio is used to measure liquidity in a credit score?
Net Profit Margin
Debt-to-Equity
Current Ratio
Operating Cash Flow to Debt Ratio
What does the use of 'should' in banking references indicate?
Certainty
High Risk
Uncertainty
No Action Required
Which of the following is a sign of overtrading?
Slow sales growth
High cash reserves
High receivables/payables
Low inventory
What is the first step in the credit control cycle?
Credit Check
Set Terms
Invoice Sent
Record Receivable
Which ratio is used to assess profitability in a credit score?
Quick Ratio
Interest Cover
Net Profit Margin
Inventory Turnover
What is a consequence of overtrading?
Cash surplus
Supplier issues
Low inventory
High quality
What action is advised when a banking reference uses 'should'?
No further action
Immediate action
Further checks advised
Ignore the reference
Which of the following is a fix for overtrading?
Increase expansion
Seek equity not debt
Increase inventory
Reduce credit control
What is a key element of credit policy documents related to monitoring?
Credit Limit Setting
Monitoring & Review
Authorization Levels
Reporting
Which ratio is used to measure gearing in a credit score?
Current Ratio
Debt-to-Equity
Net Profit Margin
Inventory Turnover
What is a shortcoming of credit ratings related to updates?
Frequent Updates
Infrequent Updates
Comprehensive Updates
Timely Updates
What is the second step in the credit control cycle?
Set Terms
Credit Check
Invoice Sent
Record Receivable
Which ratio is used to assess efficiency in a credit score?
Receivables Collection Period
Quick Ratio
Net Profit Margin
Operating Cash Flow to Debt Ratio
What is a key element of credit policy documents related to debt collection?
Credit Terms
Debt Collection Procedures
Customer Credit Assessment
Reporting
What is a fix for overtrading related to capital?
Slow down expansion
Improve working capital
Increase inventory
Reduce credit control
Which ratio is used to measure cash flow in a credit score?
Current Ratio
Quick Ratio
Operating Cash Flow to Debt Ratio
Debt-to-Equity
What is a key element of credit policy documents related to authorization?
Credit Limit Setting
Authorization Levels
Monitoring & Review
Reporting
What is a consequence of overtrading related to cash?
Cash surplus
Cash shortage
High cash reserves
Low cash reserves
