What is the difference between a credit sale (with a higher price as compared to the cash sale) and an interest based loan transaction? Explain it with an example.

Q: Why is it essential to know different kinds of loans?

A: A loan helps in determining the money supply and helps new businesses in the lending process. The…

Q: How an Ijarah contract is different from an installment-based credit sale?

A: Ijarah denotes a contract where one party transfers the right to use an item he owns to another…

Q: How do sellers benefit from allowing their customers to use credit cards?

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Q: Give and explain the factors that affect the interest rate on the loan

A: Following are the factors that affect interest rate on the loan:  1. Supply and Demand Interest…

Q: What is the net credit sales?

A: As per the information given,  Net credit sale = Closing balance of Trade and other receivables -…

Q: Is the following statement true or false? Open-end loans are often called line-of-credit accounts. O…

A: A loan provided by a financial body to a borrower that has a pre-approved credit limit and can be…

Q: What is the difference between a line of credit and a short-term loan?

A: Short term loan:   A loan is borrowed money that is to be paid back along with the interest. A…

Q: From the standpoint of a borrower, is long-term or short-term credit riskier? Explain

A: credit risk is define as the chances of a loss due to  borrower's failure to repay obligation in…

Q: How can we determine a Loan's Balance, Principal, and Interest?

A: Loan balance can be determined with the help of formulae: PV is present value r is rate N is number…

Q: Which of the following is NOT commonly regarded as being a credit policy variable? * Collection…

A: “Since you have asked multiple question, we will solve one question for you. If you want any…

Q: Credit scoring is a process used to   Multiple Choice   determine what interest rate to charge a…

A: Credit score : it is a number between 300 - 850 which depicts consumers creditworthiness.

Q: Explain the difference between a trade discount and a cash discount.

A: Discount is the deduction from the cost of product or service that a seller offers to the buyer…

Q: Illustrate some examples in the area of loan transactions?

A: Loan transactions Accounting: Loans refer to one of the best options for financing. Every business…

Q: What is a sale on credit and why it is needed? Give three examples?

A: Sale on Credit: A sale on credit is revenue earned by a company when it sells goods and allows the…

Q: Why might a lender prefer a loan with a lower interest rate and a participation?

A: One meaning of loan participation is multiple lenders participating in lending to the same borrower.…

Q: When would there be a discount on a loan? How about a premium?

A: The loan is purchased to finance the purchase of equipment, education purposes, the purchase of…

Q: What are the main differences between ARMs and FRMs loans? You need to highlight the differences in…

A: Loan which are provides to the borrower either in Adjusted Rate of Mortgage or Fixed Rate of…

Q: What is the indifference point under the net present value? When would there be a discount on a…

A: SOLUTION- NET PRESENT VALUE = PRESENT VALUE OF CASH INFLOW - PRESENT VALUE OF CASH OUTFLOW.

Q: Explain mezzanine loan?

A: Mezzanine financing is a blend of both debt and equity financing. It is a way for firms to raise…

Q: Define each of the following terms: l. Stretching accounts payable; free trade credit; costly trade…

A: Trade credit is the outstanding due arising from sales or purchases made on credit. Accounts Payable…

Q: In your own definition what is credit and what is collection

A: The businesses tend to conduct their operations not only on a cash basis but also on a credit basis.…

Q: What do you understand from trade and cash discount? How to calculate trade discount, cash discount…

A: SOLUTION- To increase sales revenue and attract more buyers, every company offers trade and cash…

Q: Explain how an installment loan differs from revolving credit in terms of risk and the nature of the…

A: Installment credit is a type of loan in which the borrower receives a defined, or limited, sum of…

Q: types of credit extension? which one is the biggest?

A: Different types of credit extensions are a) Personal loans-granted to individuals on the basis of…

Q: What does it mean when a lender accelerates on a note? What is meant by forbearance?

A: Promissory note is written by the borrower and sent to the lender. In promissory note, borrower…

Q: If a person charges interest on a loan transaction equivalent to the inflation rate than will it be…

A: Time value of the money is the value of the money which a person must use in order to know how much…

Q: What is a compensating balance? What effect does a compensatingbalance requirement have on the…

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Q: why loan officer prefer accrual basis accounting

A: The financial statement of a firm can be prepared based on accrual basis of accounting or cash basis…

Q: what are two types of credit

A: "We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Which of the following is the function of the financial market ? Select one :  a .  It decides the…

A: The financial system is the most important factor in economic transformation. Finance helps bridge…

Q: What are mortgage discount points?  When does it make sense to pay points on a loan?  How can a…

A: Mortgage discount point are all such points which will be reducing the total amount of fees which an…

Q: Explain ARMs and Floating Rate Loans?

A: Loan is referred as the amount which is borrowed from the financial institutions or individual at…

Q: What is a credit limit? How does it impact credit utilization (debit-credit ratio) and why is that…

A: Credit Limit :- Credit limit is an limit of spending on an Customer or its the maximum credit can a…

Q: What is the process of Borrowing with Credit Cards?

A: The credit card is a vital instrument to upsurge the buying power. The credit card facility aids to…

Q: The original amount of money in a loan transaction is known as what?

A: Introduction: A loan is nothing but an amount of money lent from one or more individuals or…

Q: what is the relationship between tne intrest rate and the bank prime loan rate

A: The prime rate (prime) and interest rate are both set by the Federal Reserve Bank (the Fed). In…