A Clause in a Mortgage Loan Contract Requiring the Borrower

question 8

Multiple Choice

A clause in a mortgage loan contract requiring the borrower to purchase homeowner's insurance is an example of a

• A)proscriptive covenant.
• B)prescriptive covenant.
• C)restrictive covenant.
• D)constraint-imposed covenant.

---

Definitions:

Owner's Drawings

The amount of cash or other assets withdrawn by the owner from the business for the owner's personal use.

Net Income

The amount of profit earned by a business after all expenses and taxes have been subtracted from total revenue.

IFRS

A global set of accounting principles called International Financial Reporting Standards, formulated by the International Accounting Standards Board (IASB) to steer the compilation of financial statements worldwide.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholder equity at a specific point in time.