Which One of the Five Cs of Credit Refers to the General

question 60

Multiple Choice

Which one of the five Cs of credit refers to the general economic situation in the customer's line of business?

• A) Capacity
• B) Character
• C) Conditions
• D) Capital
• E) Collateral

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Definitions:

Indirect Cost

Costs that are not directly traceable to a specific product or activity, such as overhead, administration, and salaries for management.

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services and are considered a variable cost.

Factory Overhead

All indirect costs incurred during the manufacturing process, excluding direct materials and direct labor.

Factory Rent

Factory rent refers to the cost associated with leasing a premise for manufacturing operations, classified as an overhead expense in accounting.