Lending Practices and Loans, Finance And Accounting

Question: What is a down payment?
A
Always 20% of the price of the house

B
Payment on a house required by law

C
The monthly mortgage payment

D
Money put down towards the payment of the house by the buyer at the time of purchase which is deducted from the price

Note: Answer not sure
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Question: Why would someone not use a credit card to purchase a car?
A
Credit limits on a credit card are not high enough to purchase a car

B
Car dealers force consumers to use loans

C
Interest rates on credit cards tend to be higher than on a loan for a car or a house

D
It is illegal to pay for a car using credit cards

Note: Answer not sure
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Question: What would a company that wants to decrease their debt to equity ratio do?
A
Take out a new long term loan

B
Take out a new short term loan

C
Pay off a short term loan

D
Collect on receivables

Note: Answer not sure
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Question: What is the debt that must be repaid before a subordinated debt receives any payment in the event of default called?
A
Down Payment

B
Senior Debt

C
Subsequent Debt

D
Second Round Debt

Note: Answer not sure
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Question: What does the term "Closing" mean?
A
The day a price is agreed on for a home transaction

B
The meeting where the buyers, sellers, and their representatives meet to finalize the legal exchange of property

C
The process of being approved for a mortgage

D
A legal document used to transfer the ownership of a property

Note: Answer not sure
1. Report
Question: Why can a lender not deduct the loans made from their net income?
A
Because there is no reduction in their assets — there is only a change from cash assets to receivables

B
Because it is considered the income of the borrower

C
Because it has minimal impact on tax revenue

D
Because there is no need to include it as long as the loan is paid back within a year

Note: Answer not sure
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Question: What is the short-term loan that provides temporary financing until more permanent financing is available called?
A
Interim Financing

B
Contingency

C
Overdraft

D
Mortgage Modification

Note: Answer not sure
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Question: Why can a borrower not deduct loan repayments from their income when calculating taxes?
A
Because there is no precedent allowing it

B
Because the lender will be deducting them on their side

C
Because they were not taxed on the proceeds of the loan, they can not deduct repayments either

D
Because it is unfair to the borrowers

Note: Answer not sure
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Question: What does the term "Assignment" denote?
A
The transfer of ownership of mortgage from one company or individual to another

B
The process of researching a property's title

C
Filing for bankruptcy

D
A provision in a mortgage home loan that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the loan

Note: Answer not sure
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Question: What would happen to the balance sheet of a company that has automobiles with loans associated with them, and sells the automobiles for more than the carrying value of the loan?
A
There will be no impact

B
The company would be out of compliance with loan covenants

C
There will be gain on the sale of automobiles, and a reduction in debt

D
There will be loss on the sale of automobiles, and an increase in debt

Note: Answer not sure
1. Report

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Question: What is a down payment?

Question: Why would someone not use a credit card to purchase a car?

Question: What would a company that wants to decrease their debt to equity ratio do?

Question: What is the debt that must be repaid before a subordinated debt receives any payment in the event of default called?

Question: What does the term "Closing" mean?

Question: Why can a lender not deduct the loans made from their net income?

Question: What is the short-term loan that provides temporary financing until more permanent financing is available called?

Question: Why can a borrower not deduct loan repayments from their income when calculating taxes?

Question: What does the term "Assignment" denote?

Question: What would happen to the balance sheet of a company that has automobiles with loans associated with them, and sells the automobiles for more than the carrying value of the loan?