1. A bank guarantee is a guarantee from a lending institution ensuring the liabilities of a debtor will be met,where the bank takes responsibility to pay off the guarantees if the debtor fails to settle the debt. ( )|2. A performance bond serves as collateral for the buyer's costs incurred if services or goods are not provided asagreed in the contract. ( )| 3. A bank guarantee and a letter of credit both are instruments which enable customers, or debtors, to acquire

Bank guarantee refers to the form of surety that is being provided by a financial lending…

A bank guarantee is a guarantee from a lending institution ensuring the liabilities of a debtor will be met, where the bank takes responsibility to pay off the guarantees if the debtor fails to settle the debt. (O A performance bond serves as collateral for the buyer's costs incurred if services or goods are not provided as agreed in the contract. ( )

A bank guarantee is a guarantee from a lending institution ensuring the liabilities of a debtor will be met, where the bank takes responsibility to pay off the guarantees if the debtor fails to settle the debt. (O A performance bond serves as collateral for the buyer's costs incurred if services or goods are not provided as agreed in the contract. ( )

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 6TP: When a customer is delinquent on paying a notes receivable, your company has the option to continue...

See similar textbooks

Similar questions

refers to the possibility that the debtors supported by bank credit are unable or unwilling to repay the debts on time as stipulated in the contract for various reasons, causing losses to the bank. (A) Credit risk (B) Market risk (C) Operational risk (D) Liquidity risk
A Letter of Credit (LC) is a document that guarantees the buyer's payment to the sellers. It is issued by a bank and ensures timely and full payment to the seller. If the buyer is unable to make such a payment, the bank covers the full or the remaining amount on behalf of the buyer. Why would the bank pay the remaining amount on behalf of the buyer, and what would be the risk exposed to the bank? Please explain thoroughly.
The debtor-creditor relationship is one where the customer instructs the bank to act on its behalf in a specified transaction (e.g. to buy or sell shares, Bonds or Treasury Bills) True False
Customer loans are classified on a Depository Institution (DI)'s balance sheet as Select one: A. liabilities, because the customer may default on the loan. B. assets, because the DI earns servicing fees on the loan. C. assets, because the DI's major asset is its client base. D. assets, because DIs originate and monitor loan portfolios. E. liabilities, because the DI must transfer funds to the borrower at the initiation of the loan.
Loan covenants are used for which of the following reasons?a. To protect the lender from the borrower’s substantially weakening of the latter’s financial position.b. To protect the borrower from the lender’s calling the loan early.c. To protect the auditors from false information by the borrower.d. To protect shareholders from management taking on too much debt.
The debtor-creditor relationship is one where the customer instructs the bank to act on its behalf in a specified transaction (e.g. to buy or sell shares, Bonds or Treasury Bills) Select one: i. True ii. False
What federal law protects cosigners on a loan agreement? What is the bank required to do? What other protections are included in this law?
As part of the safeguards against imprudent banking, the General Banking Law imposes limits or restrictions on loans and credit accommodations which may be extended by banks. Which of the following are not considered limits and restrictions on loans and credit accommodation? a. NO commercial bank shall make any loan or discount on the security of shares of its own capital stock. b. DOSRI Rules – promulgated by BSP, upon authority of Section 5 of the General Banking Law. c. Anti-Money Laundering Law d. SBL Rules – those promulgated by the Bangko Sentral ng Pilipinas upon authority of Section 35 of the General Banking Law of 2000.
Every deposit accepted by the bank constitutes: a. A credit on the part of the banker towards the depositor b. An investment on the part of the banker towards the depositor c. A debit on the part of the banker towards the government d. A loan on the part of the banker towards the depositor
When loans are obtained from the bank or lending institutions, the accounts receivable may be pledged as collateral security for the payment of the loans requiring no entry nor disclosure with respect to pledged accounts in the books of the borrower TRUE OR FALSE
Loan structuring is the process of designing a loan to satisfy the financing demands of a business borrower. At the same time, it tries to protect the lender against losses caused by the borrower's refusal to repay the debt, as well as the interest and fees associated with it. Determine the process of credit facilities structuring that takes place in the bank.
8 What is the function of Deposit Insurance Corporation? Select one: It does not give guarantee for a loan taken by insured bank. It eliminates competition between commercial banks. It keeps records of malpractices in the form of fraud, forgeries or outright theft committed by financial officers of insured banks or other financial institutions & publish them. It keeps the deposit from the insurance companies.