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Question 1

is an act of trading goods or services between two or more parties without the use of money —or a
monetary medium, such as a credit card. In essence, bartering involves the provision of one good or service
by one party in return for another good or service from another party.

Answer 1

Barter

Question 2

10 Reasons Why Money Is Important

Answer 2

Money transformed the world
2. Money can lead to better goods and services
3. Money is linked to happiness
. Money frees you from working to survive
5. Money pays for more life experiences
6.Money helps families support each other
7. Money reduces financial stress
8. Money can strengthen communities
9. Having money helps you make money
10. Who has money (and who doesn’t) determines violence

Question 3

was the first credit bureau founded in 1899 and began collecting
data on Americans.

Answer 3

Atlanta-based Retail Credit Company (RCC)

Question 4

The first credit card was the Diners Club card in

Answer 4

1950.

Question 5

has many meanings in the financial world, but it most commonly refers to a contractual
agreement in which a borrower receives a sum of money or something else of value and commits to repaying
the lender at a later date, typically with interest.

Answer 5

“credit”

Question 6

can also refer to the creditworthiness or credit history of an individual or a company—as in “she has
good credit.” In the world of accounting, it refers to a specific type of bookkeeping entry

Answer 6

Credit

Question 7

represents an agreement between a creditor (lender) and a borrower (debtor).

Answer 7

Credit

Question 8

promises to repay the lender, often with interest, or risk financial or legal penalties.

Answer 8

debtor

Question 9

is a letter from a bank guaranteeing that a seller will
receive the full amount that it is due from a buyer by a certain agreed-upon date. If the buyer fails to do so,
the bank is on the hook for the money.

Answer 9

letter of credit

Question 10

represents the maximum amount of credit that a lender (such as a credit card company) will
extend (such as to a credit card holder).

Answer 10

credit limit

Question 11

refers to a loan from a bank or other financial institution that makes a certain amount of
credit available to the borrower for them to draw on as needed, rather than taking all at once.

Answer 11

line of credit

Question 12

is a preset borrowing limit that can be tapped into at any time. The borrower can
take money out as needed until the limit is reached.

Answer 12

line of credit

Question 13

involves a loan with no fixed end date—a credit card account being a good example. As
long as the account is in good standing, the borrower can continue to borrow against it, up to whatever credit
limit has been established.

Answer 13

Revolving credit

Question 14

Advantages of credit card

Answer 14

1. Credit card is convenient.
2. Responsible for building financial health
3. Flexible credit
4. Protect from theft
5. Cheap currency conversion
6. Purchase protection
7. Teaching kids financial literacy
8. Extended warranties
9. Provide discounts, incentives, and offers
10. Keep a record of expenses.
11. Building a line of record
12. Credit cards provide affordable EMI facilities
13. No need to carry cash
14. Car rental insurance
15. The CARD Act
16. It is easy to access

Question 15

Disadvantages of Credit Cards

Answer 15

1. Temptation to Overspend
2. Accumulating Debt
3. High Interest Rates
4. Annual Fees
5. Potential for Theft or Fraud
6. Careful Monitoring Required
7. Late Fees
8. Complex Terms
9. Potential for Harm to Your Credit Score
10. Reduced Discretionary Income

Question 16

refers to credit in business dealings like selling goods on credit where the customer
promises to pay money later, buying goods on credit where we, the customer of the supplier, promise to
pay to the supplier on a later date.

Answer 16

Trade Credit

Question 17

refers to money, goods, or services provided on the agreement with the consumer
to pay later with the charges for using the credit.

Answer 17

Consumer Credit

Question 18

is an extension of consumer credit. In bank credit, the bank gives loans and credit facilitates to
clients. Consumer credits are given based on creditworthiness, analysis of financial statements, and value of
the asset given by consumers as security.

Answer 18

Bank Credit

Question 19

involves the continuous credit in which the lender gives the extension of credit to the
borrower so long as the account is regular and open by regular payments like in case of credit card the credit
is given regularly and limit of credit is given and payment to be made on monthly or quarterly basis

Answer 19

Revolving Credit

Question 20

has a feature of both installment credit and revolving credit.

Answer 20

Open Credit

Question 21

is the extension of bank credit. When we obtain credit from banks by way of loan, the
bank sets the fixed monthly installment as repayment type of loan along with interest up to a certain period
till the loan gets re-paid along with interest.

Answer 21

Installment Credit

Question 22

the credit is given for services availed earlier. Like lawyers ask for final fees once the case
is over, the accountants charge after filing the returns.

Answer 22

. Service Credit

Question 23

Types of Credit

Answer 23

1. Trade Credit
2. Consumer Credit
3. Bank Credit
4. Revolving Credit
5. Open Credit
6. Installment Credit
7. Service Credit

Question 24

Nine Sources of Credit

Answer 24

1. Commercial Banks
2. Financial Institutions
3. Trade Credit
4. Credit Cards
5. Public Deposits
6. Commercial Paper
7. Debentures
8. Invoice Financing
9. Startup Finance

Question 25

Credit management is the process of deciding which customers to extend credit to and evaluating those customers’ creditworthiness over time.

Answer 25

Credit Management

Question 26

The 5 steps in the credit management process

Answer 26

1. You establish your credit policy 2. Customers fill out a credit application 3. You conduct research 4. You approve or deny the request for credit 5. You continuously monitor customers’ credit

Question 27

An organization that advances credit and lends to others must consistently ensure that new business aligns with its credit risk tolerance.

Answer 27

Credit Policy?

Question 28

Types of Credit Policy

Answer 28

1. Loose credit 2. Flexible credit 3. Tight credit 4. No credit