Some of the external sources that can be used for credit investigation are

national government

4. I. Credit investigators are responsible for performing credit analysis of clients

 II. Credit investigators work for bank, credit management companies, trading organizations
granting credit
Both statements are true
. Spurious titles of property can be accepted as collateral to obtain credit.

False

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
1, II, III, IV
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.
False

It is the most common credit score used to determine loan eligibility and the interest rates a
person pays.
FICO score
These are the factors in the determines credit limit
I. Character
II. Capacity
III. Capital
IV. Personal loans
I, II, & III only

This reflects the likelihood of the borrower defaulting at any given time

long-term credit rating

. 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
credit rating
The amount the creditor believes is the maximum debt the customer can incur and repay
promptly

credit limit
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
P 4.050,00
P 3,000,000

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.

670 - 739
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
limit on debt-paying powers
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 company that uses statistics and mathematical formulas called algorithms to determine a
person’s credit score.
FICO

Sovereign credit ratings apply to business and government.

False 

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?
9,000,000

Applicants in this score range are considered subprime borrowers.

580 - 669
The first step in checking customer’s credit rating is to ask your new customers to complete
a credit application form.

True 

The first step in checking customer’s credit rating is to ask your new customers to complete
a credit application form.

True 

In the appraisal of machinery and equipment, the original invoice or historical cost is considered
in determining the appraised value of this method.
Zonal valuation

Replacement cost

Applicants in this range are at the top of the  list for the best rates from the lenders
740 – 799

In percentage of acquisition cost type of appraisal of property, the original invoice or the
historical cost is considered in determining the appraised value.
True 

Corporate credit ratings apply to

corporations
Immovable properties are classified as either agricultural, residential, commercial, or
industrial.

True

They are responsible for performing credit analysis of clients.

credit investigator
A debt instrument with a rating below BB is considered to be a speculative grade or a junk
bond.
False

 It is important to update credit files as a preparatory step to revising credit limit.
True 

 Debtors use credit scores to evaluate the probability that an individual will repay his or her
debts.

False 

Only 8% of the applicants in this score range are likely to become seriously delinquent in the
future.
580 – 669
 800 - 850

 The goal of the investigation is to obtain factual and accurate information that will lead to
an appropriate credit decision. 

True 

 Credit scores apply only to individuals

True 

In relation to credit application, bank reports

give details of the bank’s relationship with the company, the company’s borrowing
capacity and its level of debt.

Audited financial statements

can provide a good view of the business’s liquidity, profitability and cash flow.

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
IV. Appraise the creditors’ ability to pay 
I, II, & III only
 Credit ratings apply to individuals, while credit scores apply only to businesses and
government.

False 

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.

False

This predicts the borrower likelihood of defaulting at any given time in the extended future.
long-term credit rating
The following items enumerated below are instances of fraud, except
Spurious titles
Property claims on government land

A credit report  
 can provide a good view of the business’s liquidity, profitability and cash flow.

give details of the bank’s relationship with the company, the company’s borrowing capacity
and its level of debt.
These are the factors that determine credit limit
I. Customers past performance
II. General prevailing condition
III. Length of credit period
IV. Company policy
I, II, III, & IV
FICO generally includes in the development of its credit scores with a rough estimate of the
emphasis they place on each category.

True 

The following are the advantages of credit limits, except

Credit limits operate as an overall device for the control of credit extension

Credit limit represents the amount the creditor believes is the maximum debt the customer
can incur and repay promptly
A credit score is a person's financial story packed into a three-digit number, which indicates
a person's credit risk.

True

 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
Movable machinery and equipment are those that cannot be uprooted or removed without
defacing or destroying the property.
False

Verification of the applicant’s personal and credit reputation can be done through third-
party inquiries.

True 

A property that is not owned and not possessed by the borrower is unacceptable as
collateral.

True 

1. A property of appraisal is an estimate of

a. Cost
b. Credit limit
c. Price
d. Collection

credit 
. Cost

 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.

False 
Audited financial statements
can provide a good view of the business’s liquidity, profitability and cash flow.
FICO generally includes in the development of its credit scores with a rough estimate of the
emphasis they place on each category.

True 

Sovereign credit ratings apply to

national government
They are responsible for performing credit analysis of clients.
credit investigator
The following items enumerated below are instances of fraud, except
Land with torrens title
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
personal loans
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.
300 - 579
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?
10,800.000

The first step in checking customer’s credit rating is to ask your new customers to complete
a credit application form.

True 

Movable machinery and equipment are those that cannot be uprooted or removed without
defacing or destroying the property.
False 

In relation to credit application, bank reports

give details of the bank’s relationship with the company, the company’s borrowing capacity
and its level of debt.

It is important to update credit files as a preparatory step to revising credit limit.

True 
Applicants in this range are at the top of the  list for the best rates from the lenders
 800 - 850
Spurious titles of property can be accepted as collateral to obtain credit.

False 

A company that uses statistics and mathematical formulas called algorithms to determine a
person’s credit score.
FICO

This reflects the likelihood of the borrower defaulting at any given time.
short-term credit rating
The amount the creditor believes is the maximum debt the customer can incur and repay
promptly
credit limit
Only 8% of the applicants in this score range are likely to become seriously delinquent in the
future.
670 - 739
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.

False 

Debtors use credit scores to evaluate the probability that an individual will repay his or her
debts.

False 

. 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

Credit investigation
Applicants in this score range are considered subprime borrowers.
580 - 669
Corporate credit ratings apply to
corporations
A property that is not owned and not possessed by the borrower is unacceptable as
collateral.

True 

These are the factors in the determines credit limit

I. Character
II. Capacity
III. Capital
IV. Personal loans
I, II, & III only
Credit scores apply only to individuals

True 

1. A property of appraisal is an estimate of

a. Cost
b. Credit limit
c. Price
d. Collection
price

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

P 4,275,000
 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
IV. Appraise the creditors’ ability to pay 

I, II, & III only

The following are the advantages of credit limits, except
Minimize wasted sales effort and provide to some degree a more or less automatic control
over the account receivable account
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
credit rating
Sovereign credit ratings apply to business and government.

False 

 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 score

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.

False 

It is the most common credit score used to determine loan eligibility and the interest rates a
person pays.
FICO score
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

1, II, III, IV
Verification of the applicant’s personal and credit reputation can be done through third-
party inquiries.

True

A credit score is a person's financial story packed into a three-digit number, which indicates
a person's credit risk.

True 

The first step in checking customer’s credit rating is to ask your new customers to complete
a credit application form.

True 

Credit ratings apply to individuals, while credit scores apply only to businesses and

government.

False 

In the appraisal of machinery and equipment, the original invoice or historical cost is considered
in determining the appraised value of this method.
Percentage of acquisition cost

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.
False 

A credit report  
is a loan and bill payment history kept by a credit bureau.  
4. I. Credit investigators are responsible for performing credit analysis of clients
 II. Credit investigators work for bank, credit management companies, trading organizations
granting credit
 
Both statements are true
These are the factors that determine credit limit
I. Customers past performance
II. General prevailing condition
III. Length of credit period
IV. Company policy
I, II, III, & IV
This predicts the borrower likelihood of defaulting at any given time in the extended future.
long-term credit rating
The goal of the investigation is to obtain factual and accurate information that will lead to
an appropriate credit decision. 

True 

In percentage of acquisition cost type of appraisal of property, the original invoice or the
historical cost is considered in determining the appraised value.

True 

During wide fluctuations of money value, it is unwise for creditors to grant loans.
True
The debtor refers to individual or entity that
borrows money from another individual or entity.
The individual or entity that lends money to another individual or entity is the
Creditor
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
I, II, III, IV
Credit does not have an effect to productivity.
False

This is the customer supplied information which is usually obtained at the time of credit
application.
credit information sheet
The following are the advantages of credit except
 Credit contributes to the extravagance and carelessness on the part of the borrowers
For individual applicants, the following credit information should be secured and verified
I   -  Age
II  -  References and reputation
III -  Income
IV -  Residence
I, II, III, IV
Savings in time and transaction costs will result in higher margins for all the components of
the distribution system.

True
These are the guides in the performance of credit function of the company.
policy

He is responsible for application review and investigation of the applicant's credit history.
Credit manager
Credit may be secured to establish an enterprise and finance its various transactions.

True

This refers to the personality of the debtor.

character

Credere means
trust

Long-term credit ratings predict the borrower's likelihood of defaulting at any given time in
the extended future.

True
Standard credit procedures are uniform in all companies.
False
A statement that defines or restricts the actions that a credit professional can take or not take in a
specific situation or decision.
rule
This is actual working steps that should be followed in an appropriate order to accomplish a
desired result.
procedure
The following are elements of credit, except
collection

These consist of person's real and personal property which can be a strong foundation for
credit approval.
capital
Things of value may mean 
cash form of credit or merchandise form of credit
Letter of credit is a tool for financing international trade.

True
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.
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
I, II, III
These are the C's of credit, except
credit standing
These are detailed ways of carrying out policies.
company practices
This outlines the activities and responsibilities in obtaining credit approval for a potential
customer before sales
credit policy procedure
The standardized form that a customer or borrower uses to request credit is the
credit application
The one who has the major role in developing the credit policies is the
Credit manager
First Statement: Credit in its nature plays a vital and major part in any economy.
Second Statement: A great advantage of credit in business is convenience.
Both statements are true
For individual applicants, the following credit information should be secured and verified,
except
extramarital affairs
Credit does not only benefit the consumer but the entire business industry as well.

False

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

III, I, IV, II, V

He is responsible for reviewing credit application for completeness and accuracy.

sales representative
Credit according to purpose
Investment/ agricultural/ real estate/ industrial/ export credit
The routine functions performed by credit personnel
I   -  checking discount
II  -  evaluating credit risk
III -  checking credit ratings
IV -  checking orders for credit
IV, I, II, III
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
policy
The main objective of a credit investigation is to verify the information given in the
information sheet.

True
Credit that involves exact amount of money loaned, or money value for non-cash form of
credit refers to
definite sum of money
A promise to pay to be valid should be in writing.

True
Long-term credit rating reflects the likelihood of the borrower defaulting within the year.

False

The main objective of credit investigation is to

verify the information given in the information sheet.
Loans, accounts, whether checking or savings accounts, provide helpful information in sizing
up the customer's credit and financial ability.

True
The following are the factors affecting restrictive credit policy:
I   -  Seller over-extension
II  -  Seller monopoly
III -  Narrow profit margin
IV -  Unfavorable business condition

I, II, III, IV
Telephone contacts can be one of the sources of credit information.

True
 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.
Second Statement: One of the advantages of credit is that credit encourages over-zealous
and aggressive entrepreneurs to over-expand unreasonably.
 
Only first statement is true
The promise to pay should specify
principal amount, interest, maturity date
This is information obtained from the suppliers of the customer.

Trade information 
In marketing oriented company, the desire to push sales might lead to extension of credit to
unworthy or risky parties.
 True
In investment credit, the objects of credit are merchandise or goods.

False

This outlines the activities and responsibilities in obtaining credit approval for a potential
customer before sales orders are processed.

credit policy procedure

The debtor refers to individual or entity that
borrows money from another individual or entity.

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. True 
The following are elements of credit except 
collection
The individual or entity that lends money to another individual or entity is the
creditor
The following are the C's of credit except

credit standing
The ability to obtain a thing of value in exchange for a promise to pay definite sum of money on
future determinable time is
credit
The promise to pay should specify
 Principal amount, interest, maturity date
The one who has the major role in developing the credit policies is the
Credit manager 
The routine functions performed by credit personnel
I. Checking the discount
II. Evaluating credit risk
III. Checking credit ratings
IV. Checking orders for credit
IV, I, II, III

The standardized form that a customer or borrower uses to request credit is the
credit application

The creditor has the obligation to pay debt and the debtor has the right to collect payment.
False 
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

III,I,IV,II,V
During wide fluctuations of money value, it is unwise for creditors to grant loans.

True 
This is actual working steps that should be followed in an appropriate order to accomplish a
desired result.
Procedure
These are the guides in the performance of credit functions of the company.

credit policies
These are detailed ways of carrying out policies.
company practices
These consist of person's real and personal property which can be a strong foundation for
credit approval.

capital

A promise to pay, to be valid should be in writing, acknowledge by one party only. False 
A statement that defines or restricts the actions that a credit professional can take or not take in a
specific situation or decision.
rule
Loan which is intended for the purchase of house and lot, for house construction, or
improvement.
Real estate loan
 In commercial bank credit, the creditor is a commercial bank while the debtor can be a business
firm or private businessman.

True 
This is a loan extended intended for the acquisition of fertilizers, pesticides, seedlings,
transportation of agricultural products and farm improvements.
Agricultural credit

Savings in time and transaction costs will result in higher margins for all the components of
the distribution system.
True 
Consumer credit is classified
according to type of user
First Statement: Credit in its nature plays a vital and major part in any economy.
Second Statement: A great advantage of credit in business is convenience.

Both statements are true

Letter of credit is a tool for financing international trade.

True 
This is the customer supplied information which is usually obtained at the time of credit
application
credit information sheet
In investment credit, the objects of credit are merchandise or goods.

False 
Closed-end credit is also called
Installment credit
This refers to the information obtained from the suppliers of the customer.
trade information
The following are the advantages of credit except 
Credit contributes to the extravagance and carelessness on the part of the borrowers
Credit according to form
 Cash/Merchandise form of credit

The main objective of a credit investigation is to verify the information given in the
information sheet. True 
Open-end credit is also known as
Revolving credit
For individual applicants, the following credit information should be secured and verified, except
extramarital affairs
For individual applicant, the following credit information should be secured and verified
I.    Customer's name
II.   Age
III.  Employment
IV.  Bank reference
I, II, III, IV

Medium-term loans are

payable for a period of one to five years
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.
 Second Statement: One of the advantages of credit is that credit encourages over-zealous
and aggressive entrepreneurs to over-expand unreasonably.
 
Only first statement is true
Credit according to purpose
 Investment/ agricultural/ real estate/ industrial/ export credit

FICO generally includes in the development of its credit scores with a rough estimate of the
emphasis they place on each category. True 
Corporate credit ratings apply to

corporations

Credit ratings apply to individuals, while credit scores apply only to businesses and

government. False 
The amount the creditor believes is the maximum debt the customer can incur and repay
promptly.

credit limit
Debtors use credit scores to evaluate the probability that an individual will repay his or her
debts. False 
Only estimated 8% of the applicants in this score range are likely to be seriously delinquent
in the future.

670 - 739
The following are the advantages of credit limits, except
credit extension wasted sales effort and provide to some degree a more or less automatic
control of credit extensions
This predicts the borrower likelihood of defaulting at any given time in the extended future.
long-term credit rating
It is the most common credit score used to determine loan eligibility and the interest rates a
person pays.
FICO score
Audited financial statements
can provide a good view of the business’s liquidity, profitability and cash flow.
A company that uses statistics and mathematical formulas called algorithms to determine a
person’s credit score.
FICO
The following items are the factors that determine the credit limit
I   - character
II  - capacity
III - capital
IV - personal loans
I, II & III only
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.

personal loans
A credit report
is a loan and bill payment history kept by a credit bureau.   In relation to credit application,
bank reports
give details of the bank’s relationship with the company, the company’s borrowing capacity
and its level of debt.
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

credit rating

A credit score is a person's financial story packed into a three-digit number, which indicates
a person's credit risk. True 
Sovereign credit ratings apply to
national government
Applicants in this range are considered subprime borrowers.
 I.  Credit investigators are responsible for      performing credit analysis of clients
  II. Credit investigators work for bank, credit management companies, trading organizations
granting credit
Both statements are true

Ownership and possession of properties presented as collateral need not be verified.

False

They are responsible for performing credit analysis of clients.

credit investigator
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?
P 10,800,000

Verification of the applicant’s personal and credit reputation can be done through third-
party inquiries. True 
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. False 
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.
Only first statement is true

An appraisal of prospective borrower's ability and willingness to repay a loan, carried out by
a credit analyst is
Credit investigation
Collection procedure is laid down usually in the credit policy.
True 
Right of lien is the
right to retain possession of goods until full payment of account

The specific procedures for collecting a debt cannot be changed and same procedure
should be applied in any situation throughout the process. False 
 Past due accounts are also called
Non-performing loans
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?
P 5,250,000
Detailed list of steps for ordered execution leading to when and how to collect past-due amounts
collection procedure
The total amount that must be collected to bring all accounts up-to-date or in current form.
collection goal

If the bank’s past due ratio is below 25%, some of their privileges are suspended by the
Bangko Sentral. False 
It refers to the set of procedures a company uses to ensure payment of overdue account
receivables.
collection policy
Right to stop the goods in transit
Stoppage in transit
When you have several contacts with a non-paying customer and he hasn’t resolved the account,
you may need to
consider legal action.
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 ?
95.24%
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?
67.80%
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.
True 
First statement:  The unpaid seller has the right to resell goods when he stops the goods in
transit regardless of the condition. 
Second statement:  Right of lien is the right to resell goods when the creditor stops the
goods in transit.
Both statements are false
 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. True 
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?
P 1,100,000
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.
Both statements are true
 The first step in collecting a debt from a customer is to
send him a second invoice clearly marked as overdue.
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
I, II, & III

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. True 
 Right to stop the goods in transit
Stoppage in transit
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?
67.80%
It refers to the set of procedures a company uses to ensure payment of overdue account
receivables.
collection policy
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.
Both statements are true
 Past due accounts are also called
Non-performing loans

Collection procedure is laid down usually in the credit policy. True 

The first step in collecting a debt from a customer is to
send him a second invoice clearly marked as overdue.
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?
P 5,250,000

If the bank’s past due ratio is below 25%, some of their privileges are suspended by the
Bangko Sentral. False 
The total amount that must be collected to bring all accounts up-to-date or in current form.
collection goal

The specific procedures for collecting a debt cannot be changed and same procedure
should be applied in any situation throughout the process. False 
Right of lien is the
right to retain possession of goods until full payment of account

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.
True 
When you have several contacts with a non-paying customer and he hasn’t resolved the account,
you may need to
consider legal action.
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?
P 1,100,000
Detailed list of steps for ordered execution leading to when and how to collect past-due amounts
collection procedure
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 ?
95.24%
First statement:  The unpaid seller has the right to resell goods when he stops the goods in
transit regardless of the condition. 
Second statement:  Right of lien is the right to resell goods when the creditor stops the
goods in transit.
Both statements are false
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.

False 
The firm should send out bills more frequently or make phone calls in between to remind
customers to pay.

True 
First statement:  The credit company should send out bills more frequently, or make phone
calls in between, to remind customers to pay.
Second statement:  Billable transactions are those lane level transactions delivered to the
authority's toll collection system such that they may be billed to accounts.
  
Both statements are true
Billing procedure addresses three tasks in the billing process, which involve the following,
except
receiving the payment
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. level three

The billing process

I. Review billing information
II. Prepare and send invoices
III. Print invoice batch
IV. File invoice copies
I, III, II, IV
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
sales invoice
The process of generating invoice to recover sales price from the customer is called
billing
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:  The longer the bill is unpaid, the less likely is the chance to collect
money from customers.
Only second statement is true
 Statement that indicates the money owed for services or products
bill
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.
Both statements are false
This level assumes that the customer forgot to send paymentlevel one
The Billing process
II, IV, I, III
 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
 IV, V, VI, I, II, III, IV
The company should send a letter to the customers in default even if they don't intend to
actually go to collection of debts.

False 
Billable transactions means those lane level transactions delivered to the authority's toll
collection system such that they may be billed to accounts.

True 
A document with a list of products or services that the customer needs to pay
invoice
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.
Only second statement is true
File the retained invoice copies as needed, either by invoice number or by customer name.

True 
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.
Both statements are false
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?
P 5,250,000
Right of lien is the
 right to retain possession of goods until full payment of account
The first step in collecting a debt from a customer is to
send him a second invoice clearly marked as overdue.
Billable transactions means those lane level transactions delivered to the authority's toll
collection system such that they may be billed to accounts. True 
Collection procedure is laid down usually in the credit policy. True 
Statement that indicates the money owed for services or products.
bill
This level assumes that the customer forgot to send payment.
level one
It refers to the set of procedures a company uses to ensure payment of overdue account
receivables
collection policy

The unpaid seller has the right to resell goods when he stops the goods in transit. True 
File the retained invoice copies as needed, either by invoice number or by customer.

True 
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.

False 
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. level three

Send out bills more promptly or make phone calls in between to remind to customers to
pay.

True 
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
IV, V, VI, I, II, III
When you have several contacts with a non-paying customer and he hasn’t resolved the account,
you may need to
consider legal action.

If the bank’s past due ratio is below 25%, some of their privileges are suspended by the
Bangko Sentral. False 
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.
 
Only second statement is true
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?
67.8%
Billing procedure addresses three tasks in the billing process, which involve the following ,
except
receiving payment
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.
Only second  statement is true 
List of steps for ordered execution leading to when and how to collect past-due amounts
collection procedure
The specific procedures for collecting a debt cannot be changed and same procedure should be
applied in any situation throughout the process.

False 
Right of lien  is applicable when the goods have not been delivered or still in the seller’s
possession. True 
How the firm collected money from customers depends on the type of business. True 
The Billing Process
I. Prepare and send invoices
II. Review billing information
III. File invoice copies
IV. Print invoice batch
II, IV, I. III
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
I, II, III

If the bank’s past due ratio is below 25%, some of their privileges are suspended by the
Bangko Sentral. False 
Bill is a statement that indicates the money disbursed for payment of services or
products  False 
Collection procedure is laid down usually in the credit policy. True 
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
I, II, III, IV, & V

Collection procedure is laid down usually in the credit policy. True 

The bank's past due ratios are continually being monitored by top management and also by
the Bangko Sentral. True 
First statement:  The unpaid seller has the right to resell goods when he stops the goods in
transit regardless of the condition.
Second statement:  Right of lien is the right to resell goods when the creditor stops the goods in
transit.
Both statements are false
Send the letter even if the company don't intend to actually go to collection of debts.

False 
First Statement:   Collection policy goals can take a liberal or conservative approach to
collections, allowing that to define their collection procedures.
Second statement:   If the bank’s past due ratio is over 25%, some of their privileges are
suspended by the Bangko Sentral.
Both statements are true

The credit company should send out bills more frequently, or make phone calls in between,
to remind customers to pay.

True 
Collection efficiency  is equal to actual collections over collection goal

True 
Collection policy is the detailed list of steps for ordered execution leading to when and how
to collect past-due amounts. False

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.
Both statements are true

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.
True 
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?
80%
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.
 
Both statements are true
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.
Only first statement is true