Which One of the fiVe Cs of Credit Refers to the fiNancial

question 215

Multiple Choice

Which one of the five Cs of credit refers to the financial reserves of a customer?

• A) Capacity.
• B) Character.
• C) Conditions.
• D) Capital.
• E) collateral

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Definitions:

Direct Materials

Materials that can be directly linked to the production process of a product and are essential components of the final product.

First-In, First-Out Method

An inventory valuation method where the first items acquired are assumed to be sold first, affecting the cost of goods sold and ending inventory valuation.

Materials Cost

The direct and indirect costs associated with the raw materials used in the production of goods.

Equivalent Unit

An Equivalent Unit is a measure used in cost accounting to express the amount of work done on partially finished goods in terms of fully finished goods.