The Lender Uses a Credit Application to Determine Whether the Borrower

question 123

Multiple Choice

The lender uses a credit application to determine whether the borrower has the ____ to handle the debt.

• A)character and confidence
• B)confidence and capacity
• C)acumen and capacity
• D)character and capacity
• E)credit and character

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Definitions:

Business Risk

The exposure to factors that may cause a business to experience lower profits or financial loss, including market competition, regulatory changes, and operational failures.

Endowment Management

The process of overseeing and making investment decisions for an endowment fund to ensure its ability to support a particular organization or cause over time.

Bookkeeping

The practice of recording all financial transactions, ensuring accuracy and completeness in the financial records of an organization.

Accrual Basis Accounting

An accounting method where income and expenses are recorded when they are earned or incurred, regardless of when the cash is actually received or paid.