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A suite of integrated business applications that extend a company's accounts receivable to facilitate credit management and related business processes.
Collection efficiency is equal to actual collections over collection goal
Credit according to purpose
List of steps for ordered execution leading to when and how to collect past-due amounts
AAA Merchandising has past due accounts amounting to P 750,000 and has maturing accounts of P 4,500,000. If the actual collection is P5,000,000, what is the total collection goal for the period?
First Statement: Collection policy goals can take a liberal or conservative approach to collections, allowing that to define their collection procedures.
The unpaid seller has the right to resell goods when he stops the goods in transit. What conditions should be considered in this case? I goods are perishable in nature II seller should notify the buyer of his intention of resale III unpaid seller resells the goods post exercising his right of lien or stoppage IV resale where the right of resale is reserved in the contract of sale V property in the goods has not passed to the buyer
A company that uses statistics and mathematical formulas called algorithms to determine a person’s credit score.
During wide fluctuations of money value, it is unwise for creditors to grant loans.
These are detailed ways of carrying out policies.
A document sent to a customer with a list of products or services they have bought and their prices, any sales tax, the total amount, and the date before which the customer must pay
In the contract of sale, the seller can sue the buyer if he refused to pay his obligation. The buyer is liable to pay I. The price of the goods delivered II. Damages III. Interest for the delayed payment
A quantified assessment of the credit worthiness of a borrower in terms of general forms or with respect to a particular debt or financial obligation is known as
The specific procedures for collecting a debt cannot be changed and same procedure should be applied in any situation throughout the process.
The credit company should send out bills more frequently, or make phone calls in between, to remind customers to pay.
The following are the advantages of credit except
The bank's past due ratios are continually being monitored by top management and also by the Bangko Sentral.
Billing procedure addresses three tasks in the billing process, which involve the following , except
Credit that involves exact amount of money loaned, or money value for non-cash form of credit refers to
. This level assumes that the customer forgot to send payment
For individual applicants, the following credit information should be secured and verified I - Age II - References and reputation III - Income IV - Residence
First statement: The credit company should send out bills more frequently, or make phone calls in between, to remind customers to pay. Second statement: The longer the bill is unpaid, the less likely is the chance to collect money from customers.
Long-term credit ratings predict the borrower's likelihood of defaulting at any given time in the extended future.
Savings in time and transaction costs will result in higher margins for all the components of the distribution system.
A credit score is a person's financial story packed into a three-digit number, which indicates a person's credit risk.
The following are the C's of credit except
Bill is a statement that indicates the money disbursed for payment of services or products
A property that is not owned and not possessed by the borrower is unacceptable as collateral.
Corporate credit ratings apply to
In commercial bank credit, the creditor is a commercial bank while the debtor can be a business firm or private businessman.
Leniency in the implementation of credit policies will enable the firm to sell obsolete goods or get rid of inventories which are no longer salable.
The following items are the factors that determine the credit limit I - character II - capacity III - capital IV - personal loans
FICO generally includes in the development of its credit scores with a rough estimate of the emphasis they place on each category.
This is the customer supplied information which is usually obtained at the time of credit application.
Loans, accounts, whether checking or savings accounts, provide helpful information in sizing up the customer's credit and financial ability.
Standard credit procedures are uniform in all companies.
Send the letter even if the company don't intend to actually go to collection of debts.
For individual applicant, the following credit information should be secured and verified I. Customer's name II. Age III. Employment IV. Bank reference
The amount the creditor believes is the maximum debt the customer can incur and repay promptly.
This predicts the borrower likelihood of defaulting at any given time in the extended future.
This refers to the personality of the debtor.
The total amount that must be collected to bring all accounts up-to-date or in current form.
The standardized form that a customer or borrower uses to request credit is the
The credit professional has an obligation to their employer and to the credit community in general to behave professionally and to guard against violating, even unintentionally, any laws against restraint of trade.
This outlines the activities and responsibilities in obtaining credit approval for a potential customer before sales orders are processed.
When the credit firm have made several contacts with a non-paying customer and he hasn't resolved the account, the credit firm may need to consider legal action.
Things of value may mean
Credit does not have an effect to productivity.
The Billing process
The following are elements of credit, except
In the appraisal of machinery and equipment, the original invoice or historical cost is considered in determining the appraised value of this method.
The process of generating invoice to recover sales price from the customer is called
The following are the advantages of credit limits, except
1. A property of appraisal is an estimate of a. Cost b. Credit limit c. Price d. Collection
Past due accounts are also called
The main objective of a credit investigation is to verify the information given in the information sheet.
A document with a list of products or services that the customer needs to pay.
AAA Merchandising has past due accounts amounting to P 750,000 and has maturing accounts of P 4,500,000. What is the collection efficiency if AAA's actual collection is P 5,000,000 ?
Audited financial statements
4. I. Credit investigators are responsible for performing credit analysis of clients
In the appraisal of machinery and equipment, the original invoice or historical cost is considered in determining the appraised value in this method.
Spurious titles of property can be accepted as collateral to obtain credit.
These are the factors affecting liberal policies I - Financial condition of the firm II - Keen competition III - Liquidation of heavy supply of merchandise IV - Seller monopoly
The following are elements of credit except
Billable transactions means those lane level transactions delivered to the authority's toll collection system such that they may be billed to accounts.
It is usually given as number, is also an expression of worthiness that can be used for businesses or individual expression consumers. a. Credit limit b. Credit standing c. Credit score d. Credit rating
Credit procedures and policies include such operations as: I - credit investigation and appraisal II - documentation, loan or product releases and collaterization III - credit application and interview IV - credit evaluation, recommendation & approval V - collection, release of collateral and documents
The billing process I. Review billing information II. Prepare and send invoices III. Print invoice batch IV. File invoice copies
This refers to the information obtained from the suppliers of the customer.
The unpaid seller has the right to resell goods when he stops the goods in transit.
Some of the external sources that can be used for credit investigation are I. Credit bureau II. Newspapers III. Court records IV. Banks V. Credit investigator
Victory Appliance Co. Has past due installment as of September 30, 2019 amounting to P 300,000 and installment falling due on September 2019, P 800,000. What is the collection efficiency as of September 30, 2019 if the actual collection is P 880,000?
General guideline on how to act in an ordinary or extra-ordinary situation that recur from time to time bearing in mind the accomplishment of established company objectives
In percentage of acquisition cost type of appraisal of property, the original invoice or the historical cost is considered in determining the appraised value.
These are the C's of credit, except
The following are the factors affecting restrictive credit policy: I - Seller over-extension II - Seller monopoly III - Narrow profit margin IV - Unfavorable business condition
First statement: When the credit firm have made several contacts with a non-paying customer and he hasn't resolved the account, the credit firm may need to consider legal action. Second statement: The specific procedures for collecting a debt can vary, a company needs to follow several general guidelines to ensure collection while trying to retain customers for future sales.
The first step in checking customer’s credit rating is to ask your new customers to complete a credit application form.
They are responsible for performing credit analysis of clients.
Right of lien is the
This level assumes that the customer has no intention to pay and states a specific data by which payment must be made on collection processes that will be initiated.
Verification of the applicant’s personal and credit reputation can be done through third-party inquiries.
First statement: Bill is the process of generating invoice to recover sales price from the customer. Second statement: Billing is a document that indicates the money owed for services or products.
Victory Appliance Co. Has past due installment as of September 30, 2019 amounting to P 300,000 and installment falling due on September 2019, P 800,000. If the actual collection is P 880,000, what is the collection efficiency as of September 30, 2019?
These are the guides in the performance of credit functions of the company.
These are the steps to set up Collection Management System I. Make plan for invoice reminders II. Determine how you deal with non-payments III. Make a plan for turning non-payees over to an outside source IV. Capture information about customer account V. Learn the laws relating to collections VI. Decide if you need to check credit
Upper limit is usually establish within which the credit of any borrower is set on the basis of his ability to pay and on the requirements as judge by the purposes for which the loan is made.
A document with a list of products or services that the customer needs to pay
The goal of the investigation is to obtain factual and accurate information that will lead to an appropriate credit decision.
The building of the property offered for collateral has a total area of 900 sq. m. The prevailing construction cost of the commercial building is P 12,000. What is the value of the building?
AAA Merchandising has past due accounts amounting to P 750,000 and has maturing accounts of P 4,500,000. If the actual collection is P 5,000,000, what is the total collection goal?
If the bank’s past due ratio is below 25%, some of their privileges are suspended by the Bangko Sentral.
Send out bills more promptly or make phone calls in between to remind to customers to pay.
These are the factors in the determines credit limit I. Character II. Capacity III. Capital IV. Personal loans
Only estimated 8% of the applicants in this score range are likely to be seriously delinquent in the future.
Credit scores apply only to individuals
It is important to update credit files as a preparatory step to revising credit limit.
First Statement: Verification of the applicant’s personal and credit reputation can be done through third-party inquiries. Second Statement: Spurious titles of property can be accepted as collateral to obtain credit.
In marketing oriented company, the desire to push sales might lead to extension of credit to unworthy or risky parties.
How the firm collected money from customers depends on the type of business.
First Statement: In a marketing oriented company, the desire to push sales might lead to extension of credit to unworthy or risky parties who might end up to be bad debtors after all who will cause the collapse of the company.
Credit according to form
The company should send a letter to the customers in default even if they don't intend to actually go to collection of debts.
First statement: According to the “Balance Small Business”, in order to get paid by debtors, collection process should vary and execute based on the kind of customers. Second statement: Bill is a statement that indicates the money disbursed for payment of services or products.
Statement that indicates the money owed for services or products
Only 8% of the applicants in this score range are likely to become seriously delinquent in the future.
Collection procedure is laid down usually in the credit policy.
The following items enumerated below are instances of fraud, except
A credit report
The creditor has the obligation to pay debt and the debtor has the right to collect payment.
An appraisal of prospective borrower's ability and willingness to repay a loan, carried out by a credit analyst is
Upper limit is usually establish within which the credit limit of any borrower is set on the basis of his ability to pay and on the requirements as judged by the purposes for which the loan is made. This refers to the limits on
He is responsible for application review and investigation of the applicant's credit history.
A debt instrument with a rating below BB is considered to be a speculative grade or a junk bond.
I. Credit investigators are responsible for performing credit analysis of clients II. Credit investigators work for bank, credit management companies, trading organizations granting credit
Credere means
Victory Appliance Co. Has past due installment as of September 30, 2019 amounting to P 300,000 and installment falling due on September 2019, P 800,000. If the actual collection is P 880,000, what is the total collection goal for September 2019?
These are the factors that determine credit limit I. Customers past performance II. General prevailing condition III. Length of credit period IV. Company policy
Statement that indicates the money owed for services or products.
It is normal for credit professionals to discuss with anybody about discriminatory trade practices or anything that might be construed as restraint of trade or in violation of antitrust legislation.
Billing procedure addresses three tasks in the billing process, which involve the following, except
The specific procedures for collecting a debt can vary, a company needs to follow several general guidelines to ensure collection while trying to retain customers for future sales.
This refers to the ability to obtain a thing of value in exchange for a promise to pay definite sum of money on future determinable time.
Medium-term loans are
Loan which is intended for the purchase of house and lot, for house construction, or improvement.
First statement: Bill is a statement that indicates the money disbursed for payment of products or services . Second statement: How the firm collected money from customers depends on the type of business.
A property of appraisal is an estimate of
The ability to obtain a thing of value in exchange for a promise to pay definite sum of money on future determinable time is
Right to stop the goods in transit refers to
These are the guides in the performance of credit function of the company.
This is actual working steps that should be followed in an appropriate order to accomplish a desired result.
In percentage of acquisition cost type of appraisal of property, the new acquisition price of similar machinery and equipment is the basis used, less accumulated depreciation.
Credit may be secured to establish an enterprise and finance its various transactions.
There's no need to ask for business customer's permission in checking their credit by the credit company in having a trade credit application.
Sovereign credit ratings apply to
First statement: Collection procedure is laid down usually in the credit policy. Second statement: If the bank’s past due ratio is below 25%, some of their privileges are suspended by the Bangko Sentral.
First Statement: Credit in its nature plays a vital and major part in any economy.
The debtor refers to individual or entity that
It refers to the set of procedures a company uses to ensure payment of overdue account receivables
This is a loan extended intended for the acquisition of fertilizers, pesticides, seedlings, transportation of agricultural products and farm improvements.
. A quantified assessment of the credit worthiness of a borrower in terms of general forms or with respect to a particular debt or financial obligation is known as
Consumer credit is classified
First statement: Bill is a statement that indicates the money disbursed for payment of services or products. Second statement: How the firm collected money from customers depends on the type of business.
. Spurious titles of property can be accepted as collateral to obtain credit.
AAA Merchandising has past due accounts amounting to P 750,000 and has maturing accounts of P 4,500,000. What is the collection efficiency If the actual collection is P 5,000,000?
Long-term credit rating reflects the likelihood of the borrower defaulting within the year.
Credit applicants in this range may be required to pay a fee or deposit, and applicants with this rating may not be approved for credit at all.
This is information obtained from the suppliers of the customer.
Applicants in this score range are considered subprime borrowers.
Applicants in this range are considered subprime borrowers.
Collection policy is the detailed list of steps for ordered execution leading to when and how to collect past-due amounts.
The one who has the major role in developing the credit policies is the
Closed-end credit is also called
Open-end credit is also known as
The promise to pay should specify
It refers to the set of procedures a company uses to ensure payment of overdue account receivables.
Letter of credit is a tool for financing international trade.
These consist of person's real and personal property which can be a strong foundation for credit approval.
First statement: The unpaid seller has the right to resell goods when he stops the goods in transit regardless of the condition.
For individual applicants, the following credit information should be secured and verified, except
If the property has a zonal value of P 4,500 per square meter and has an area of 950 sq. m., the property has a total appraised value of a. P 3,000,000 b. P 4,050,000 c. P 4, 500,000 d. P 4,275,000
Immovable properties are classified as either agricultural, residential, commercial, or industrial.
Movable machinery and equipment are those that cannot be uprooted or removed without defacing or destroying the property.
A promise to pay to be valid should be in writing.
This outlines the activities and responsibilities in obtaining credit approval for a potential customer before sales
Debtors use credit scores to evaluate the probability that an individual will repay his or her debts.
1. he building of the property offered for collateral has a total area of 900 sq. m. The prevailing construction cost of the commercial building is P 12,000. What is the value of the building?
The firm should send out bills more frequently or make phone calls in between to remind customers to pay.
Written policies have distinct advantages such as I - More precision II - More stability III - Avoidance of unintentional changes caused by varied opinion on credit IV - Continuity in credit operations V - Over-all company objectives
A credit investigation is made up of I. Personal interview with the applicant in his residence or place of business or both II. Documentary verification III. Inquiry from third parties Appraise the creditors’ ability to pa
This is the customer supplied information which is usually obtained at the time of credit application
Right of lien is applicable when the goods have not been delivered or still in the seller’s possession.
This level assumes that the customer forgot to send payment.
He is responsible for reviewing credit application for completeness and accuracy.
The main objective of credit investigation is to
File the retained invoice copies as needed, either by invoice number or by customer.
A promise to pay, to be valid should be in writing, acknowledge by one party only.
In investment credit, the objects of credit are merchandise or goods.
In relation to credit application, bank reports
The individual or entity that lends money to another individual or entity is the
1. This level assumes that the customer has no intention to pay and states a specific data by which payment must be made on collection processes that will be initiated.
File the retained invoice copies as needed, either by invoice number or by customer name.
Sovereign credit ratings apply to business and government.
1. An appraisal of prospective borrowers’ ability and willingness to repay a loan, carried out by a credit analyst. a. Credit investigation b. Credit application c. Credit rating d. Credit score
A statement that defines or restricts the actions that a credit professional can take or not take in a specific situation or decision.
This reflects the likelihood of the borrower defaulting at any given time.
It is normal for credit professionals to discuss with anybody something about discriminatory trade practices or anything that might be construed as restraint of trade or in violation of antitrust legislation.
It is the most common credit score used to determine loan eligibility and the interest rates a person pays.
The first step in collecting a debt from a customer is to
When you have several contacts with a non-paying customer and he hasn’t resolved the account, you may need to
Ownership and possession of properties presented as collateral need not be verified.
First statement: Collection procedure is laid down usually in the credit policy. Second statement: When the credit firm have made several contacts with a non-paying customer and he hasn't resolved the account, the credit firm may need to consider legal action.
Credit procedures and practices includes such operations as: I. Credit investigation and appraisal II. Documentation, loan or product releases and collaterization III. Credit application and interview IV. Credit evaluation, recommendation and approval V. Collection, release of collaterals, and documents
Telephone contacts can be one of the sources of credit information.
Credit does not only benefit the consumer but the entire business industry as well.
Credit ratings apply to individuals, while credit scores apply only to businesses and government.
Applicants in this range are at the top of the list for the best rates from the lenders
Detailed list of steps for ordered execution leading to when and how to collect past-due amounts
The routine functions performed by credit personnel I. Checking the discount II. Evaluating credit risk III. Checking credit ratings IV. Checking orders for credit
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