Property Promised to the Lender as Compensation If the Borrower

question 74

Multiple Choice

Property promised to the lender as compensation if the borrower defaults is called

• A)collateral.
• B)deductibles.
• C)restrictive covenants.
• D)contingencies.

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Definitions:

Differential Cost

The difference in total cost between two alternatives, used in decision-making processes.

Period Cost

Expenses that are not directly tied to the production process and are expensed in the period they are incurred.

Discretionary Cost

Costs that are not essential for the operation of a home or business and can be adjusted or eliminated depending on financial circumstances.

Condensed Income Statement

A simplified financial statement that summarizes revenues, costs, and expenses to show a company's net income over a specific period.