Which of the Following Is an Example of an Indirect

question 15

Multiple Choice

Which of the following is an example of an indirect loan?

• A) An automobile dealer negotiates the loan terms with the individual and then presents the agreement to the bank. The bank then makes the loan.
• B) An automobile dealer refers a customer to the local credit union. The customer goes to the credit union and gets an auto loan secured by the customer's certificates of deposit.
• C) A homebuyer gets a mortgage over the Internet.
• D) A student gets a student loan guaranteed by Sallie Mae.
• E) None of the above.

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Definitions:

Internal Control

Mechanisms and steps a firm takes to confirm the trustworthiness of its financial and accounting reports, enhance accountability, and stop fraudulence.

Controls

Procedures or policies implemented by a company to safeguard its assets, enhance the reliability of its accounting records, increase efficiency, and ensure compliance with laws and regulations.

NSF Check

a check that has been returned by a bank because the account it was drawn on does not have sufficient funds.

Bank Reconciliation

The process of matching and comparing figures from accounting records against those presented in a bank statement to find discrepancies.