Credit
the amount of money borrowed
What is Principle?
Conditions
the environment in which the business operates
a record of credit history
Business Credit is?
credit granted to a business by a financial institution or another company
Debtor
the party that receives the credit
the "borrower"
Movement of money
Cash Flow
T or F :
Credit risk is the potential of credit not being paid
True
What is Closed-End Credit?
a loan for a specific amount that must be repaid with interest a specific date or schedule
What is the "Lender"?
The party extending credit : The Creditor
What is Capital?
owner's investment
What is APR?
Annual Percentage Rate
the annual cost of credit charged by a lender
What is Trade Credit?
an agreement between two parties in which one party lends another money or goods and services to another party
What is Credit?
T or F
Capacity is the property a business uses
False
Correct Answer:
Capacity is the ability of a business to repay a loan
a written set of guidelines
Credit Policy
T or F : Consumer Credit is granted to a business by a financial institution or another company?
False
Correct Answer : Consumer Credit is granted to individual consumers by a retail business
T or F :
an Installment Loan is a specific amount of money that is repaid with interest in regular installments
True
What is "collateral"
the property a business uses to secure a loan
Define "Finance Charge"
the total amount paid by a borrower
an agreement that allows the borrower to use a specific amount of credit over a period of time
What is Open-end credit?