Charles Rickman Is Applying for a Loan from the Bank

question 186

Multiple Choice

Charles Rickman is applying for a loan from the bank.The bank has determined that he has never been late making payments on past loans.Which of the 5 Cs of credit is the bank looking at?

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

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Definitions:

Operating Loss

A financial condition where a company's total operating expenses exceed its total revenues, indicating a negative operating profit.

Income Summary

An account in the ledger that aggregates all income and expense accounts to determine the net income or loss for a period.

Prepaid Rent

This is the amount paid for rent in advance of the rental period to which it relates, recorded as an asset on the balance sheet until the period to which it applies.

Loss on Sale of Land

The financial loss recognized when land is sold for less than its purchase price or carrying value on the books.