When First Rate National Bank Screens, Evaluates, and Monitors Loan

question 56

True/False

When First Rate National Bank screens, evaluates, and monitors loan applicants to see if they are creditworthy, it is acting to reduce their transaction costs.

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Definitions:

Debit

A bookkeeping record that raises the value of an asset or expense, or reduces the value of a liability or equity.

Expense Account

An account used to record expenditures incurred by a company, relating to its operational activities.

Supplies

Items used in the day-to-day operations of a business, typically consumable in nature, such as office supplies, cleaning materials, and manufacturing components.

Accounts Payable

Accounts payable are liabilities of a business that represent its obligations to pay off a short-term debt to its creditors or suppliers.