When Evaluating the Creditworthiness of a Customer, the Term Capital

question 10

Multiple Choice

When evaluating the creditworthiness of a customer, the term capital refers to the:

• A) type of goods the customer wishes to obtain.
• B) customer's financial reserves.
• C) types of assets the customer wants to pledge as collateral.
• D) customer's willingness to pay bills in a timely fashion.
• E) nature of the customer's line of work.

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Definitions:

Taxable Income

The amount of income that is used to calculate how much tax an individual or a company owes to the government.

Married Filing Jointly

A tax filing status for married couples that allows them to combine their tax obligations into a single return.

Tax Equation

A mathematical formula used to calculate the amount of taxes owed based on income, deductions, and applicable tax rates.

Net Pay

The amount of money a worker takes home after all deductions, such as taxes and retirement contributions, have been subtracted from the gross salary.