16.2

Question 1

proprietary credit

Answer 1

card that can only be used in the stores of the company that issued it.

Question 2

credit policy

Answer 2

written set of guidelines used by an organization to determine how many and which customers will be approved for credit.

Question 3

three c’s of credit

Answer 3

criteria used to evaluate the creditworthiness of consumer credit applicants. (character, capacity, capital.)

Question 4

credit report

Answer 4

a record of credit history and financial behavior for a business or individual.

Question 5

credit bureau

Answer 5

a private firm that maintains consumer credit data and provides credit information to businesses for a fee.

Question 6

credit score

Answer 6

a numerical measure iof a loan applicant’s creditworthiness at a particular point in time.

Question 7

credit risk

Answer 7

the potential of credit not being repaid. creates cash flow problem for business.

Question 8

accounts receivable

Answer 8

a list of the individuals or businesses that owe money to a company.

Question 9

accounts receivable aging report

Answer 9

shows when accounts receivables are due, as well as the length of time accounts have been outstanding.

Question 10

collection agency

Answer 10

a company that collects past-due bills for a fee.

Question 11

five Cs of banking

Answer 11

criteria lenders use to evaluate the creditworthiness of business. (Cash flow, capacity, capital, collateral, conditions.)