Which of the Following Is a Default

question 9

Multiple Choice

Which of the following is a default?

• A) repaying a debt before it is due
• B) bankruptcy of the debtor
• C) increase of rate of interest by the creditor midway through debt repayment
• D) theft of the collateral

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Definitions:

Interest Revenue

Income earned from lending money or other financial assets that generate interest.

Maturity Date

The specified date when the principal amount of a financial instrument, such as a bond or loan, becomes due and payable.

Allowance Method

An accounting technique that estimates and accounts for bad debts expense, reducing accounts receivable by a predicted amount of uncollectible accounts.

Outstanding Receivables

Amounts due to a company for goods or services that have been delivered or sold but not yet paid by customers.