hich of the following is not a way in which banks lend short-term unsecured loans? a. Through a guaranteed credit line that has a commitment fee for any unused amount for the year b. Through credits cards lines with a certain credit limit c. By sending the amount earned from trust and investment products offered by the bank d. By lending a single date maturity loan to a debtor

hich of the following is not a way in which banks lend short-term unsecured loans? a. Through a guaranteed credit line that has a commitment fee for any unused amount for the year b. Through credits cards lines with a certain credit limit c. By sending the amount earned from trust and investment products offered by the bank d. By lending a single date maturity loan to a debtor

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...

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When a business borrows money from a bank on a non-interest-bearing note, how are the bank discount and proceeds calculated?
What business circumstance could produce a short-term notes payable created from a loan?
When a customer is delinquent on paying a notes receivable, your company has the option to continue to attempt collection or sell the debt to a collection agency. Research the benefits and challenges with each of these options and in a short essay, answer the following questions. A. What are the benefits and challenges of continuing to attempt collection yourself? B. What are the benefits and challenges of selling debt to a collection agency? C. If you had a dishonored notes receivable, which option would you select and why? D. Would you weight certain benefits or challenges differently when making your selection? How?
Which of the following is not a way in which banks lend short-term unsecured loans? Through credits cards lines with a certain credit limit Through a guaranteed credit line that has a commitment fee for any unused amount for the year By sending the amount earned from trust and investment products offered by the bank By lending a single date maturity loan to a debtor
1. Which of the following is not a way in which banks lend short-term unsecured loans? Choices: By sending the amount earned from trust and investment products offered by the bank Through a guaranteed credit line that has a commitment fee for any unused amount for the year Through credits cards lines with a certain credit limit By lending a single date maturity loan to a debtor 2. The following are methods of acquiring funds through long-term financing, except Choices: Issuing bonds with semi-annual coupon payment at a discounted price Selling equity securities at an amount above the par value indicated in the stock certificate Issuing a note that indicates a promise to pay the indicated supplier in a future date Selling equity securities with a characteristic of both debt and equity security 3. Which is false about long-term sources of a firm's capital? Choices: Preferred shares are securities whose intrinsic value is based on prospective earnings All types of…
Bank Muscat advances secured and unsecured loans to their customers. If Bank Muscat is issuing secured loans, identify which one of the following is the reason for bank to issue secured loan? a. To increase interest on loans by the banks b. To sell the collateral in the event of non-refund of the loan c. To have long standing relationship with customer d. To reduce the loan amount and time period
Which of the following is FALSE The APR is the annual rate that is required by law to be disclosed on loan documents. The EAR allows for comparison between savings accounts that have different compounding frequencies US treasury bills are considered pure discount loans the cash flows of preferred stock are considered an annuity. car loans are considered amortized loans because each payment includes interest and some principal
Which interest rate is used on very short term loans from one bank to another? A. PRIME INTEREST RATE B.TREASURY BILL RATE C. COMMERCIAL PAPER RATE D. FED FUNDS RATE
Suppose that a bank does the following: a. Sets a loan rate on a prospective loan with BR = 4.23% and ϕ = 3.16%. b. Charges a 0.33 percent loan origination fee to the borrower. c. Imposes a 9 percent compensating balance requirement to be held as noninterest-bearing demand deposits. d. Holds reserve requirements of 8 percent imposed by the Federal Reserve on the bank’s demand deposits. Calculate the bank’s ROA on this loan.
Bank A pays 2% interest compoundedannually on deposits, while Bank B pays 1.75% compounded daily.a. Based on the EAR (or EFF%), which bank should you use?b. Could your choice of banks be influenced by the fact that you might want to withdraw your funds during the year as opposed to at the end of the year? Assume that your funds must be left on deposit during an entire compounding period in order to receive any interest.
Suppose a bank offered to make loans to potential borrowers withoutchecking their credit history. What would be true of the types ofborrowers they would attract compered with banks that did checkcredit history. Would such a bank charge the same interest rateon loans as banks that check credit history? Explain those with areason in 4 lines.
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