Question
In: Accounting
You have provided an incomplete Balance Sheet to the bank and have applied for a loan....
You have provided an incomplete Balance Sheet to the bank and have applied for a loan. Which of the following statement is incorrect?
a.The bank has a right to all relevant information to make a loan decision.
b.It is your responsibility to provide correct information to the bank.
c.Your interest and the interest of the bank are in conflict.
d.The bank has to extend the loan based on information provided to it, even if such information is incomplete.
Solutions
Expert Solution
We need to provide accurate and correct information to the bank when we apply for loan. On the basis of the information provided by us to the bank , the bank will decide whether the loan is to be sanctioned or not. Also incomplete Balance sheet is not a correct information provided to the bank.
Therefore as the information is not provided completly therefore the bank has every to all the relevant information to make a loan decision. Also it is our responsibility on the first part to provide complete and correct information to the bank. Moreover as the information is provided incomplete therefore there is a conflict of interest between bank and us.
Also the bank cannot extend loan based on the incomplete or incorrect information as it is against the norms of the bank and also non Repayment of loan in such case is also higher as the bank do not have complete information.
Therefore the correct option is D.
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