If You Default on Your Automobile Loan

question 88

Multiple Choice

If you default on your automobile loan,

• A)an advance notice to you is required before your car is repossessed.
• B)no advance notice is required before repossession.
• C)the federal consumer credit laws give you protection.
• D)you don't have to pay the full balance due on the loan.
• E)the creditor pays the towing and storage costs.

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Definitions:

Carrying Amount

The book value of assets and liabilities that is reported in the financial statements, calculated as the original cost minus any depreciation, amortization, or impairment costs made against the asset.

Fair Value

The financial figure anticipated when disposing of an asset or the price to move a liability in a regulated exchange involving market entities on the date of valuation.

Gain On Bargain Purchase

Occurs when a company acquires another company for a price less than the fair market value of its net assets, resulting in a gain on the acquisition balance sheet.

Income Tax Expense

The accounting expense associated with the income taxes a company is obligated to pay to governmental authorities based on its taxable income.