Name Four Characteristics That the Equal Credit Opportunity Act Prohibits

question 14

Essay

Name four characteristics that the Equal Credit Opportunity Act prohibits considering when determining the creditworthiness of a consumer.

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Definitions:

Bad Debt Expense

An expense reported on the income statement, representing the portion of receivables that is estimated not to be collectible.

Loan Receivables

Reflects the amounts of money lent out that are expected to be repaid, typically generating interest income for the lender.

Accounting Flexibility

The range of choices that management has under GAAP (Generally Accepted Accounting Principles) in how to report financial activity.

Contract Constraints

Limitations or conditions in a contract that restrict the actions of the parties involved.