In: Finance
Please match the terms relating to the basic terminology and concepts.
Seasonal Dating _____ A. If the borrower cannot repay the loan, the lender can liquidate certain assets
Collection Policy _____ B. Customers can pay less than the full invoice amount if they pay within a certain number of days.
Credit Standards _____ C. A borrower is required to hold a certain amount of money in an account at the lender's institution.
Cash Discounts _____ D. Benefits can be used to repay a loan in the case of the death of an owner or important employee.
Loan Guarantees _____ E. A firm has particular requirements that must be met before credit is extended to customers.
Collateral _____ F. This type of discount is used most often in seasonal businesses.
Key-person Insurance _____ G. A firm has certain procedures to deal with past-due accounts.
Discount interest loan _____ H. This is used by banks to assure payment of loans to privately held companies.
Compensating balances _____ I. To estimate the annual rate, divide the interest paid by half the amount received.
Add-on interest _____ J. This is a loan in which the borrower prepays the interest.
(A) If the borrower cannot repay the loan, the lender can liquidate certain assets = COLLATERAL
(B) Customers can pay less than the full invoice amount if they pay within a certain number of days = Cash discount
(C) A borrower is required to hold a certain amount of money in an account at the lender's institution = Compensating balances
(D) Benefits can be used to repay a loan in the case of the death of the owner or important employee = Key person insurance
(E) A firm has particular requirements that must be met before credit is extended to customers = Credit standards
(F) This type of discount is used most often in seasonal businesses = Seasonal dating
(G) A firm has certain procedures to deal with past due accounts = Collection policy
(H) This is used by banks to assure payments of loans to privately held companies = Loan Guarantees
(I) To estimate the annual rate, divide the interest paid by half the amount received = Add-on interest
(J) This is a loan in which the borrower prepays the interest = Discount interest loan