Chapter 4

Question 1

Classsification of credit according to purpose

Answer 1

Agricultural Credit
Commercial Credit
Industrial Credit
Consumer Credit
Commodity loans

Question 2

These are loans to be used in the cultivation and improvement of farmlands, or in the production of agricultural products

Answer 2

Agricultural Credit

Question 3

Common types of agricultural loans

Answer 3

Time loan
Crop loan
commodity or quedan loans

Question 4

This is usually a secured loan (collaterized by the farm property where the loans funds are to be used

Answer 4

Time loan

Question 5

It finances the production of crops like rice and corn, cassava, tomatoes, and cabbage

Answer 5

Crop loan

Question 6

This is the loan to finance the marketing of harvested crops

Answer 6

Commodity or quedan loans

Question 7

This type of loan is also used for non-farm commodities by wholesalers or manufacturers

Answer 7

Commodity loans

Question 8

These are loan or credit agreements for the purpose of financing the production and marketing of commodities

Answer 8

Commercial credit

Question 9

these could be loans granted by banks to businesse or by business establishments to other business

Answer 9

commercial credit

Question 10

are loans used to finance the construction of favtory buildings or the purchase of machinery and equipment

Answer 10

industrial credit

Question 11

these are loan funds granted to individuals by banks, coops, department stores, credit card companies, and many more

Answer 11

consumer credit

Question 12

the loan funds are used to purchase personal items like tx refs, cosmetics, clothes or pay education and medical expenses

Answer 12

consumer credit

Question 13

for non farm. products, using warehouse receipts

Answer 13

commodity loans

Question 14

Commodities or goods are either

Answer 14

finished product or raw materials

Question 15

credit could also be classified according to maturity

Answer 15

short term
medium term
long term

Question 16

loans are either be

Answer 16

secured or unsecured

Question 17

it refers to a real or personal property used as collateral, usually required by the lender

Answer 17

security

Question 18

also called as character or clean loans and signature loans

Answer 18

unsecured loans

Question 19

a promissory note with only one signature is called

Answer 19

single-name paper

Question 20

promissory note taht have two signatures

Answer 20

multi-name paper

Question 21

the biggest sources of credit

Answer 21

financial institutions

Question 22

financial institutions are either be

Answer 22

intermediaries and non intermediaries

Question 23

is a go between, the one in the middle

Answer 23

intermediary

Question 24

the true sources of credit are

Answer 24

individuals
businesses
some government entities

Question 25

financial intermediaries provide the ff

Answer 25

pool funds diversification managerial competence match short term and long term continuing stream of earnings transactions are handled efficiently

Question 26

types of securities

Answer 26

stocks bonds treasury bills loans

Question 27

types of financial intermediaries

Answer 27

banks insurance companies pre-need companies pension or retirement funds investment house financing companies credit cooperatives

Question 28

types of banks

Answer 28

commercial savings bank rural banks

Question 29

is licensed by the bangko sentral and is authorized to accept deposits from the public

Answer 29

bank

Question 30

it is in the buy and sell business

Answer 30

banks

Question 31

is another bank created by law to. improve the philippine countryside, particularly the agricultural sector

Answer 31

rural banks

Question 32

the major activity of insurance companies is

Answer 32

cash accumulation

Question 33

it operates under the same cash accumulation but this one stress the major concerns of people, their childrens future and old age

Answer 33

pre need companies

Question 34

include in thir products term life insurance that will. pay the planholders beneficiary in case of death and credit insurance

Answer 34

pre need companies

Question 35

it collects employees contributions, mostly mandatory and on a monthly basis, from employees paychecks

Answer 35

pension funds

Question 36

is the channeling of private funds from various individuals and businesses for investment, as capital stock, in public corporations

Answer 36

investment house

Question 37

sells shares of stock to public

Answer 37

public corporation

Question 38

issues or sells new shares of stock to the public in exchange for cash

Answer 38

issuing corporation

Question 39

it would either a start up or newly established venture, or an existing corporation in need of funds

Answer 39

issuing corporation

Question 40

also acts as financial consultants, investment advisers and brokers, and they design pension and retirement programs among other things

Answer 40

investment house

Question 41

corporations or partnerships which are primarily organized for the purpose of extending credit facilities to consumers and to industrial, commercial

Answer 41

financing companies

Question 42

it channels the contribution of its members into loans, mostly for farm inputs like fertilizers and farm chemicals

Answer 42

credit cooperatives

Question 43

non financial sources of credit

Answer 43

appliance companies pawnshops. lending investors employers department stores

Question 44

it is the seller of the merchandise and also the lender

Answer 44

self financing

Question 45

the primary document used in pawshop

Answer 45

pledge

Question 46

the borrower called the and who signs document called

Answer 46

pledgor and pledgee

Question 47

terms uses in the 1st provider which is the suppliers pr raw materials and finished goods

Answer 47

suppliers credit mercantile credit

Question 48

terms used in commercial bank

Answer 48

lines of credit revolving credit agreements letters of credit and trust receipts packing credit advances

Question 49

terms used in the large corporations

Answer 49

commercial paper

Question 50

terms used in the finance companies

Answer 50

pledge of accounts receivables favctoring

Question 51

terms used in individuals and corporation finance companies

Answer 51

treasury bills repurchase

Question 52

terms used in the long term

Answer 52

treasury bonds corporate bonds investment credit bonds equipment leaseback

Question 53

in the buy and sell business this is the biggest source of credit

Answer 53

suppliers

Question 54

this is an agreement between a commercial bank and a business specifying the amount of short term credit the bank will make available on a non guaranteed basis

Answer 54

line of credit

Question 55

banks have limits and some limits are

Answer 55

single borrower limit reserve requirements

Question 56

in this arrangements, the buyers get the goods they want to purchase and the wholesaler simply records the total amount in their books or ledger without requiring the buyer to sign any document

Answer 56

open book credit

Question 57

it is guaranteed by bank

Answer 57

revolving credit agreement

Question 58

is issued by bank which guarantees payment to the beneficiary or payee of the LC

Answer 58

letter of credit

Question 59

is a mode of payment that is required by a seller of goods mostly in import or export business

Answer 59

letter of credit

Question 60

this is credit granted by bank to an exporter to finance the manufacturing of export goods

Answer 60

packing credit advances

Question 61

is a short term unsecured debt of the government

Answer 61

treasury bills

Question 62

2 reasons why government issue tbills

Answer 62

as economic measure to regulate the economy as a means to raise funds for short term government expenditures

Question 63

this is a loan collaterized by accounts receivable

Answer 63

pledging of AR

Question 64

very rare source of credit

Answer 64

factoring

Question 65

similar to a t bills and it is an unsecured short term certificate of debt

Answer 65

commercial paper

Question 66

these are unsecured long term debts of the governmeny

Answer 66

treasury bonds

Question 67

significances between t bill and t bonds

Answer 67

maturity usage how buyers make money

Question 68

this is a certificate indicating that a corporation has borroweda certain amount of money and promise to pay it in the future under clear terms and conditions

Answer 68

corporate bonds

Question 69

these are long term loans or bonds that finance the construction of favtory buildings, commercial warehouse, hotels

Answer 69

investment credit

Question 70

in this transaction, the owner of the equipment, to generate cash usually sells it to the finance company and the owner would simply lease it back

Answer 70

equipment leaseback