Is the credit extended by suppliers for the purchase of their goods and services

Question

Is the credit extended by suppliers for the purchase of their goods and services. A. Commercial paper B. Trade credit Commercial paper of deposit E. Marketable security Dan bought three new trucks with a loan obtained from the First National Bank If he fails to repay the loan, the bank will repossess the trucks The trucks typically represent: A line of credit. B a lockbox C. collateral. D. accounts payable. E. retained earnings. Which of the following is an arrangement by which a hank agrees to lend a specified amount of money to an organization upon request? A. A trade credit B. A floating-rate bond C. A junk bond D. A lockbox E. A line of credit The is the interest rate commercial banks charge their best customers for short-term loans. A factor rate B. over-the-counter rate C. prime rate D. credit rate E. trade rate A finance company that buys other companies' accounts receivable for less than they are worth and assumes the responsibility for collecting the debt is known as a: A. lockbox. B. factor. C. collateral D. brokerage. E. conciliator. He process of analyzing the needs of a business and selecting the assets that will maximize its value is called. A. working capital management B. factoring C. risk assessment D capital budgeting E. investment banking

Explanation / Answer

40. The supplier is providing the credit to the purchaser or buyerin order to increase the sales and facilitate the Trade, this answer is B) Trade Credit.

41. Any wealth of the borrower that is kept with the lender (bank or financial body) while lending the money is known as Collateral Thus answer is C) Collateral.

42.The credit given by back on short notice is known as E) A Line of Credit.

43. C) Prime rate

44. B) Factor

45. D) Capital Budgeting

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