Chapter 16.2 Flashcards
(11 cards)
Proprietary credit card…
can only be used in the stores of the company that issued it
Credit policy…
is written set of guidelines used by an organization to determine how many and which customers will be approved for credit
Three Cs of credit…
Character: Current debt, payment history, credit
score
Capacity: Regular income and term of
employment
Capital: All assets and liability
Credit report…
is a record of credit history and financial behavior for a business or individual
Credit bureau…
is a private firm that maintains consumer credit data and provides credit information to businesses for a fee
Credit score…
is a numerical measure of a loan applicant’s creditworthiness at a particular point in time
Credit risk…
is the potential of credit not being repaid
Accounts receivable…
is a list of the individuals or businesses that owe money to a company
Accounts receivable aging report…
shows when accounts receivables are due, as well as the length
of time accounts have been outstanding
Collection agency…
is a company that collects past due bills for a fee
Five Cs of banking…
Cash flow: Movement of money into and out of a business
Capacity: Ability to repay a loan
Capital: Owner’s investment in the business
Collateral: Property used to secure a loan
Conditions: Environment in which the business operate
