CMCP Chapter 5 Already Passed
Questions and Correct Answers 2024
Credit - ANSWER a contractual agreement in which a borrower receives something
B
of value now and agrees to repay the lender at some date in the future, generally with
interest
LU
five Cs of credit - ANSWER a system used by lenders to gauge the creditworthiness
of potential borrowers. The system weighs five characteristics of the borrower and
YC
conditions of the loan
character, capacity, capital, collateral, and conditions - ANSWER What are the five
D
Cs of credit
TU
Character - ANSWER It refers to credit history: a borrower's reputation or track
record for repaying debts. This information appears on the borrower's credit reports
ES
Credit reports - ANSWER _________ contain detailed information about how much
an applicant has borrowed in the past and whether they have repaid loans on time. These
C
reports also contain information on collection accounts and bankruptcies, and they retain
most information for seven to 10 years.
A
Capacity - ANSWER measures the borrower's ability to repay a loan by comparing
income against recurring debts and assessing the borrower's debt-to-income (DTI) ratio.
, Capital - ANSWER is the money personally invested by the debtor in a business and
is an indication of how much risk it has as well as the chance that the business will fail.
collateral - ANSWER can help a borrower secure loan. It gives the lender the
assurance that if the borrower defaults on the loan, the lender can get something back by
repossessing the ________
B
Conditions - ANSWER Refers to interest rate and amount of principal, influence the
LU
lender's desire to finance the borrower. It can also refer to how a borrower intends to use
the money
YC
credit application - ANSWER The first activity in the Credit Department as it starts
the actual operation of its function is the __________
D
True - ANSWER True or False. To guide the credit applicant, it would be good
practice to give a listing of all the company requirements upon his signifying his intention
TU
to apply for such a credit accommodation or loan
Articles of Partnership - ANSWER One of the needed documents for partnership that
ES
is duly registered with the Securities & Exchange Commission (SEC)
False. (Should be audited only) - ANSWER True or False. For corporation, one of the
C
documents that should be submitted is the latest audited/unaudited financial statements.
A
True - ANSWER True or False. Not all credit applicants need to be credit investigated
although it should be made a policy that he should at least fill up the credit application
form.
Questions and Correct Answers 2024
Credit - ANSWER a contractual agreement in which a borrower receives something
B
of value now and agrees to repay the lender at some date in the future, generally with
interest
LU
five Cs of credit - ANSWER a system used by lenders to gauge the creditworthiness
of potential borrowers. The system weighs five characteristics of the borrower and
YC
conditions of the loan
character, capacity, capital, collateral, and conditions - ANSWER What are the five
D
Cs of credit
TU
Character - ANSWER It refers to credit history: a borrower's reputation or track
record for repaying debts. This information appears on the borrower's credit reports
ES
Credit reports - ANSWER _________ contain detailed information about how much
an applicant has borrowed in the past and whether they have repaid loans on time. These
C
reports also contain information on collection accounts and bankruptcies, and they retain
most information for seven to 10 years.
A
Capacity - ANSWER measures the borrower's ability to repay a loan by comparing
income against recurring debts and assessing the borrower's debt-to-income (DTI) ratio.
, Capital - ANSWER is the money personally invested by the debtor in a business and
is an indication of how much risk it has as well as the chance that the business will fail.
collateral - ANSWER can help a borrower secure loan. It gives the lender the
assurance that if the borrower defaults on the loan, the lender can get something back by
repossessing the ________
B
Conditions - ANSWER Refers to interest rate and amount of principal, influence the
LU
lender's desire to finance the borrower. It can also refer to how a borrower intends to use
the money
YC
credit application - ANSWER The first activity in the Credit Department as it starts
the actual operation of its function is the __________
D
True - ANSWER True or False. To guide the credit applicant, it would be good
practice to give a listing of all the company requirements upon his signifying his intention
TU
to apply for such a credit accommodation or loan
Articles of Partnership - ANSWER One of the needed documents for partnership that
ES
is duly registered with the Securities & Exchange Commission (SEC)
False. (Should be audited only) - ANSWER True or False. For corporation, one of the
C
documents that should be submitted is the latest audited/unaudited financial statements.
A
True - ANSWER True or False. Not all credit applicants need to be credit investigated
although it should be made a policy that he should at least fill up the credit application
form.
