Which of the following are NOT part of the 5Cs of credit? 1. Conditions 2. Collateral 3. Candor 4. Character 5. Commitment | Homework.Study.com (2024)

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• Which of the following are NOT part of the 5Cs of credit? Select ALL applicable. a. Conditions. b. Collateral. c. Candor. d. Character. e. Commitment.
• Which of the following is not an example of liability that is estimated in amount? \\ a. obligations for gift certificates outstanding b. obligation under a loan guarantee agreement c. accrued vacation wages d. refundable customer deposits
• Contrast the following types of bonds: (a) Secured and unsecured, (b) Term and serial, (c) Registered and bearer, and (d) Convertible and callable.
• Which of the following is not a relevant consideration when evaluating whether to derecognize a financial liability? (a) Whether the obligation has been discharged. (b) Whether the obligation has been canceled. (c) Whether the obligation has expired. (d)
• A requirement for a security to be classified as held-to-maturity is (a) ability to hold the security to maturity. (b) positive intent. (c) the security must be a debt security. (d) All of these are required.
• In exchange for a $400 million fixed commitment line of credit, your firm has agreed to do the following: 1. Pay 1.91 percent per quarter on any funds actually borrowed. 2. Maintain a 5 percent comp
• Determine the term being defined or described the following statement: Returns paid to lenders for the money lent to the company.
• Which of the following is a common contingent liability that is often reported on the balance sheet as a liability because of its probable nature? A. Warranties B. Bonds C. Taxes D. Salaries
• Which of the following is not considered a liability? a. obligations for which the firm must estimate both timing and amount of payment b. obligations arising from advances from customers on unexecuted contracts and agreements c. obligations under mutuall
• If a debtor defaults and the debtor's surety satisfies the obligation, the surety acquires the right of: A) subrogation. B) primary lien. C) indemnification. D) satisfaction.
• Affirmative covenants generally would NOT include which of the following stipulations? a. The lender has the right to inspect business assets and business contract b. Limits on the borrower's total
• Answer the following regarding a company. What kind of a fee do you have to pay if you accept credit cards? What term is used to describe the value of a company has through its reputation? Would goodw
• How does a company recognize, in an informal or a formal way, that it has guaranteed commitments to future contributions to an ESOP to meet debt-service requirements?
• What is the purpose of the debt covenant from a contracting theory perspective? Is the debt contract an efficient contract?
• Which of the following represent reasonably possible contingent liabilities? Select all that apply. a. warranties b. potential legal claims c. debt guarantees d. accounts payable
• All of the following are necessary criteria for a commodity to function as money except: A) it must deteriorate quickly. B) it must be divisible. C) it must be easy to carry. D) it must be widely accepted.
• Under FRS 37 Provisions, Contingent Liabilities, and Contingent Assets, which of the following statements is true? a. Provisions shall not be recognized for future operating losses. b. The present obligation under an onerous contract shall be recognized
• Credit terms are terms for: a. when the payments for merchandise are to be made b. when the returns of merchandise are to be made c. Both of these choices are correct. d. None of these choices are correct.
• Differentiate between the two categories of liabilities (i.e. fully secured and partially secured) that have priority in business liquidation.
• Which of the following is not a condition necessary to exclude a short-term obligation from current liabilities? a. Obligation must be due within one year. b. Demonstrate the ability to complete the refinancing. c. Intend to refinance the obligation on
• Which of the following is an amendment to a financing statement that states that the debtor has no obligation to the secured party? a. An ending statement. b. A termination statement. c. A bind-up
• Which of the following is NOT a principle of Trust Service engagements? a. Security from unauthorized use b. Proficiency in preparing transactions c. Availability of the system, products, or services d. Confidentiality of information
• Choose the term that best fits each of the following definitions and descriptions. _____1. A note written in the form where the maker promises to pay the face amount plus interest at a specified rate. _____2. An unconditional written promise to pay a ce
• Which of the following statements about the characteristics of debt and equities is true? A) They can both be long-term financial instruments. B) Bond holders are residual claimants. C) The income from bonds is typically more variable than that from equit
• Can a financial institution keep borrowers from engaging in risky activities if there are no restrictive covenants written into the loan agreement?
• Which of the following is not listed in AASB 101 to determine if a liability should be classified as current? a. If the liability is guaranteed to be settled within 12 months. b. If the liability is held primarily for the purpose of being traded. c. If th
• A measurable obligation arising from agreements, contracts, or laws is called a [{Blank}] liability.
• Which of the following will not result in a temporary difference? a) Product warranty liabilities. b) Advance rental receipts. c) Installment sales. d) All of these will result in a temporary difference.
• Differentiate between the two (2) categories of liabilities (i.e., fully secured and partially secured) that have priority in business liquidation. Analyze the main reasons why unsecured creditors fav
• What are the characteristics of a loan commitment that an FI may make to a customer? In what manner and to whom is the commitment an option? What are the various possible pieces of the option premium? When does the option or commitment become an on-balanc
• Define at least two common credit agreement provisions (loan covenants).
• Match each definition with its related term by selecting the appropriate letter from the dropdown below. A. A liability account used to record the obligation to provide future services or return cash
• Utilize the ............................ Principle to estimate warranty liabilities. a.Objectivity b.Matching c.Entity d.Conservatism
• Which of the following is an advantage of the Fed's "just do it" approach to monetary policy? A) It does not rely on the money-inflation relationship. B) It is simplistic and has clarity. C) There is increased accountability of central bankers. D) The
• Determine the term being defined or described the following statement: A type of corporate financing where money is raised through loan or borrowings.
• Determine the term being defined by the following statement: A company's ability to provide financial rewards sufficient to attract and retain capital. Choose from the following choices: | Market prospects | Financial statement analysis | Debt-to-equity
• All of the following are qualities of useful information except a) faithful representation. b) materiality. c) relevance. d) flexibility.
• The following is a characteristic of a retirement plan that meets the qualifications of Code Sec. 401: 1) The plan may discriminate in favor of highly compensated employees. 2) The plan may not engage in transactions with a disqualified person because i
• Which of the following is an amendment to a financial statement that states that the debtor has no obligation to the secured party? a. An ending statement. b. A termination statement. c. A bind-up statement. d. A release statement. e. A reversion statemen
• Assume that you recently accepted a position with Frontier National Bank as an assistant loan officer. As one of your first duties, you have been assigned the responsibility of evaluating a loan reque
• Which one of the following is an unsecured liability with priority in a Chapter 7 bankruptcy? Select one: A. Compensation owed to employees for services rendered 7 months ago B. $20,000 of a $100,000 loan secured with the property having a fair value of
• Most lenders making adjustable-rate mortgage loans offer a teaser rate. Is this a good policy or is it misrepresentation?
• In evaluating a proposal to begin selling goods on credit, which of the following would not be a cause for concern? a. The need to evaluate creditworthiness. b. Forgoing the use of funds during periods of credit extension to customers. c. The reluctance o
• a) Which part of the mortgage banker s pipeline is often hedged with forward commitments? b) With standby forward commitments? Why?
• Discuss the quality of the disclosures for guarantees and commitments. Could these disclosures be improved?
• Folmar Co. is considering the following alternative financing plans: | |Plan 1|Plan 2 |Issue 10% bonds (at face value)|$1,640,000|$820,000 |Issue preferred $1 stock, $10 par|$0|$1,360,000 |Issue commo
• Which one of the following correctly describes the circ*mstances in which a contingent liability should be recognized as a liability in the financial statements? a. The chance of the future event occurring is remote. b. The chance of the future event occu
• Which of the following would be classified as a long-termliability? A. Education loan balance B. Credit card debt C. Bank card debt D. All of these
• Assume that you recently accepted a position with Stockman National Bank as an assistant loan officer. As one of your first duties, you have the responsibility of evaluating a loan request for $90,000
• Determine the term being defined by the following statement: Seller's description of a cash discount granted to buyers in return for early payment. Select from the following terms: | Sales discount | Credit Period | Discount Period | FOB Destination |
• An essential characteristic of credit unions is that: A) they are typically large. B) branching across state lines is prohibited. C) their lending is primarily for mortgage loans. D) they are organized for individuals with a common bond.
• Credit card debt is: A) secured debt. B) unsecured debt. C) restricted debt. D) unrestricted debt.
• Listed below are several information, characteristics, and accounting principles and assumptions. Match the term with the appropriate phrase that states its application.
• What are the two criteria, specified in the Conceptual Framework, that must be met before liability can be recognized in the accounting records? a. It must be probable that a future sacrifice of economic resources will be required and the liability must
• Payments, warranties, delivery dates, and so forth represent _____. A) purchase specifications B) product specifications C) terms and conditions D) postpurchase evaluation E) relationship marketing
• Choose from the following list of terms/phrases to best complete the following statements. 1. The term__________refers to a company's ability to pay for its near-term obligations. 2.The_________catego
• Which of the following is not likely to be a reason why a government might obtain an asset through an operating lease? The government: a) Does not have enough cash or credit to purchase the asset. b) Wishes to avoid the risk of owning an asset that has
• Determine the circ*mstances under which a government should recognize special assessment debt as its own obligation. Justify your answer.
• What is the potential obligation that depends on a future event arising from a past transaction?
• In a bankruptcy proceeding, what is the significance of liability with priority? What are the general categories of liabilities that have priority in a liquidation?
• Alternative Financing Plans Brower Co. is considering the following alternative financing plans: Plan 1Plan 2 Issue 10% bonds
• Which of the following is not generally written into the articles of partnership agreement? A. Rights and responsibilities of each partner B. Provisions for admitting new partners C. The amount that e
• According PAS 1 - 2005, the overall principles of financial statements preparation include the following except that a. There should be an explicit statement that all the applicable PFRSs and PASs were appropriately applied in the preparation of the fina
• Choose the answer that provides the best definition for the following statement. Theory under which a partnership s recourse debt is shared among the partners A) Qualified business income deduction B) Outside basis C) Guaranteed payment D) Economic risk o
• The business judgment rule refers to: a. Faithfulness to one's obligations and duties. b. Honesty of purpose and caring. c. Acting with due care and good faith. d. Decision making under uncertainty.
• The ability of a business to pay obligations that are expected to become due within the next year or operating cycle is called.
• According to the SEC, all of the following are criteria for determining revenue recognition, except: a) Persuasive evidence of an arrangement should exist b) Collectibility should be reasonably assured c) The sellers price to the buyer should be fixed or
• The section of a loan agreement that describes circ*mstances in which the creditor obtains additional rights is called the ______ section. a. events of compliance b. certificate of compliance c. events of termination d. events of default
• All of the following are Big Five personality factors except: A. aptitude. B. emotional stability. C. extraversion. D. conscientiousness.
• Collateralized debt is also know as: A) unsecured debt. B) secured debt. C) unrestricted debt. D) promissory debt.
• Which of the following is not a consideration in classifying a lease? A. Value of an asset on the lessor's books. B. Economic life of the asset. C. Present value of the lease payments. D. Whether the lease is cancelable.
• Define the term "contingent liability" and discuss the criteria used to classify these events or conditions. Provide some examples of contingent liabilities.
• Determine whether the following is a condition that must exist for a transaction to be considered a troubled debt restructuring or not: Creditors accept stock or subordinated debt as payment in full.
• According to the Fraud Triangle, which the following is NOT one of the requisites for fraud to occur?a. The opportunity for ill-gotten financial gain.b. Sound justification for a person to receive greater financial rewards.c. Not personally knowing
• Folmar Co. is considering the following alternative financing plans: Plan 1Plan 2 Issue 10% bonds (at face value)$1,800,000$900,000 Issue preferred $1 stock, $10 par?1,490,
• What are the essential characteristics of a liability under the definition in the Conceptual Framework? I. Settlement requiring an outflow of resources embodying economic benefits. II. A present obligation to an external party. III. A legal debt. IV.
• When the debtor has defaulted on its obligation, the creditor is entitled to recover from the surety unless which of the following is present? A) The surety is in the process of exercising its rights of exoneration against the debtor. B) The debtor had di
• Choose the term that best fits each of the following definitions and descriptions. _____1. A note written in the form where the face amount includes the interest charges. _____2. The borrowing of money with receivables pledged as security on the loan.
• Assume that you are currently negotiating a lease transaction in the role of the lessee. Discuss whether you would rather structure the lease as an operating lease or a capital lease and why. In addition, provide the conditions that would require that the
• Under normal conditions, which of the following would be most likely to increase the coupon rate required to enable a bond to be issued at par? a. Adding a sinking fund. b. Adding additional restrictive covenants that limit management's actions. c. The ra
• Write short notes on the conservative credit policy and liberal credit policy.
• The ability of a business to meet its current obligations may be determined by the ________.
• Although debt contracts require less monitoring than equity contracts, debt contracts are still subject to ____ since borrowers have an incentive to take on more risk than the lender would like. A) moral hazard B) agency theory C) diversification D) t
• All of the following except _____ is part of "The Fraud Triangle". a. Incentives/Pressures b. Opportunity c. Rationalization d. All of the Above
• Determine the term being defined by the following statement: A company's ability to generate future revenues and meet long-term obligations. . Choose from the following choices: | Market prospects | Financial statement analysis | Debt-to-equity ratio |
• The three primary policy variables to consider when extending credit include all of the following except: a. credit standards b. terms of trade c. collection policy d. level of inflation
• There are certain patterns we should expect to see on a bond amortization table. Complete the following statements regarding these patterns. a. Assuming a bond is issued at either a premium or a disc
• Identify the element or elements associated with the affirmation below: - Obligation to transfer resources arising from a past transaction.
• Based solely upon the following sets of circ*mstances indicated below, which set gives rise to a Capitalized lease for a lessor?(i) A (ii) B (iii) C (iv) D (v) E
• Determine the term being defined by the following statement: A company's ability to generate positive market expectations. Choose from the following choices: | Market prospects | Financial statement analysis | Debt-to-equity ratio | Comparative financi
• A security interest is a person's stake in personal property or fixtures that secures the performance of an obligation. Attachment is a vital step in a secured transaction. It means that the secured party has taken the steps to create an enforceable secur
• Folmar Co. is considering the following alternative financing plans: Plan 1Plan 2 Issue 10% bonds (at face value)$1,280,000$640,000 Issue preferred $1 stock, $10 par?1,060,
• Determine the term being defined by the following statement: The availability of resources to meet short-term obligations and to efficiently generate revenues. Choose from the following choices: | Market prospects | Financial statement analysis | Debt-t
• All the following statements about the Utility Function are true except: a) the function for the risk-neutral decision maker is always linear b) the Utility function for money is always upward sloping c) different kinds of decision-makers will have differ
• Determine the term being described by the following statement: Agreement to pay stipulated amounts periodically to the donor of assets by the recipient organization. a. Term endowments b. Annuity agreements c. Collections d. Pooled life income agreeme
• Which of the following will not result in a temporary difference? a.Product warranty liabilities. b.Installment sales. c.Advance rental receipts. d.All of these will result in a temporary difference.
• One way of describing the solution that high net worth provides to the moral hazard problem is to say that it: A) collateralizes the debt contract. B) makes the debt contract incentive compatible. C) state verifies the debt contract. D) removes all of
• Select the best answer for each of the following. Explain the reasons for your selection a. Which of the following is not a covered member for an attest engagement under the Independence Rule of the
• Alternative Financing Plans Folmar Co. is considering the following alternative financing plans: Plan 1Plan 2 Issue 10% bonds (at face value)$840,000$420,000 Issue preferred $1 stock, $10 par 700,000
• Which of the following is not part of the conceptual framework project? a. Objectives of financial reporting. b. Quantitative characteristics. c. Qualitative characteristics. d. Basic elements of financial statements.