Credit Risk

question 43

Multiple Choice

Credit risk:

• A) is the risk of a borrower defaulting on a loan.
• B) occurs when one party to a transaction has more information than the other.
• C) is the amount a borrower must pay in interest over the term of a loan.
• D) is the risk of not being able to qualify for a loan.

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Definitions:

Office Supplies

Items and materials used in offices for daily operations, including paper, pens, and other stationery.

Miscellaneous Expense

General ledger accounts for expenses that are not sufficiently large or regular enough to be allocated to specific expense categories.

Bank Statement

A monthly document provided by a bank detailing all transactions in a customer's account for a given period.

Note Receivable

A financial asset representing a written promise from a borrower to pay a certain sum of money to the lender at a future date.