Credit and Collection (Midterm) Flashcards
(6) Other Important Documents
Letter of Credit
Bill of Lading
Trust Receipts
Warehouse Receipts
Mortgage
Pledge
comes from the Latin word _____ which means TO TRUST
Credit
“Credere”
early shops were quite small and often times were located either inside or in front of the home of the owner
Retail Stores
3 Kinds of Consumer Credit
Charge Account
Installment Credit
Personal Loans
to inspect and pick out whatever they want to buy and have them check out through the cashier.
Grocery and Department Stores
It is executed by the maker who, as is logical to expect, is the debtor who promises that he will pay seller the amount owed at certain determinable time.
Promissory Notes
largely a brand-new form of retailing, its chief features consist of assembling all kinds of goods including non-food items, clothing, shoes hardware and countless others
Supermarkets
Loans granted to finance the acquisition or improvement of real estate.
Real Estate Loans
Consist of advances that have been made to a business enterprise to enable it to purchase or construct necessary plant and equipment.
Investment Credit
It is a letter used by a bank authorizing a designated individual firm or corporation to draw on it up to the total amount for which the credit is established.
Letter of Credit
Refers to mortgage by a corporation used as a collateral security for a loan of a fixed amount.
Close-end mortgage
It provides financial assistance (loans) to all who are members which are employed in productive activities to earn income as part of its investment operations (private)
SSS
Those letter that cannot be cancelled or revoked at any time after its issuance or better the expiration.
Irrevocable Letter of Credit
refers to power the ability to obtain goods without an actual tender of payment. He has the obligation to be done to creditor (Obligor)
Debtor
Also defined as a “receipt given” by an importer who has loaned money upon importer’s goods.
Trust Receipts
It refers to credit that is granted for a short period
to help out the borrower with his temporary working capital needs.
Commercial Loans
5 Functions of Credit:
1. To ____ the savings of the lending customers.
2. To ______ these funds financially on the basis of the careful _______ and ______ of credit.
3. To ______ risk to a degree unattainable for individual investors
4. To ______ short term into long term funds through an expedient and carefeul staggering of ______ dates.
5. To perform _____ and _____ function.
- pool
- invest, investigation, analysis
- diversify
- transform, maturity
- insurance, trust
Just another term for government borrowing, as
means of pledging the goods faith and the resources on their behalf
Public Credit
8 Advantages of Credit:
1. facilitates and _______ to the increase in ______ by making funds available for productive purposes
2. saves _____ and expense by providing a safer and more _______ means of completing transactions.
3. helps expand the ______ ______ of every member of the business
4. enables ______ _____ of goods providing an increase in material well-being
5. helps expand _______ opportunities through education, job training and jobb creation.
6. spreads ______ to various sectors of the economy.
7. makes possible to the _____ of new _____.
8. helps _____ become more convenient for customers.
- contributes
- time, convenient
- purchasing power
- immediate consumption
- economic
- progress
- birth, industries
- buying
This is type of mortgage, a corporation may issue bonds in whatever number it may deem proper under the circumstance.
Open-end mortgage
It is essential growth for the
government to provide the necessary bases for growth.
Government Financing Institution
3 Kinds of Private Development Banks
Veteran Bank
Land Bank
Sales Finance Companies
a private corporate venture in the
financing of distribution through the purchase of the vendor’s instalment sales contract.
Sales Finance Companies
As provided under section 74 of RA no. 3844, it is intended to finance the acquisition by the government of landed estates for division and resale to small landholders as well as the purchase of the landholdings by the agricultural lessee from the landowner.
Land Bank
It is a written account of goods shipped by any person, signed by the agent of the owner of the vessel, or by its master, acknowledging receipts of the goods and promising to deliver them safe at the port directed, damages of the sea excepted.
Bill of Lading
3 Types of Loan Agreement
Revolving Credit
Term Loan
Stand-by-Commitment
It belongs to non-bank sector of the system and gather funds for its lending operation from sources other than deposit.
Investment Banking
A warehouseman, in the absence of some lawful excuse provided by the warehouse receipts law, is bound to deliver the goods upon a demand made either by the holder of a receipts for the goods or by the depositer, if such demand is accompanied with.
Obligation to Deliver
a bulk loan availed by manufacturers and public utility
firms granted to finance the acquisition of new or additional plants and
machinery
Industrial Loan
(2) objects of Mortgage
Chattel Mortgage
Mortgage on Real Property
It is an investment banks which are concerned with the transfer of capital from those have more funds than they actually use
to those who need for utilization in long term activities.
Investment Houses
4 Disadvantages of Credit:
1. Credit at times, encourages ______. This happens when those in charge of the ______ of other people throw caution to the wind and thereby become careless _____ in their eagerness and desire and make huge _____.
2. tends to contribute to ______ and carelessness on the part of people who obtain it.
3. many entrepreneurs resort to _____-______. Failure to generate expected income can cause a _____ which affects the nation’s economy,
4. Owing to the observation that business can be ______ or _______ rapidly though the use of credit.
- speculation, savings, unscrupulous, profits
- extravagance
- over-expansion, collapse
- expanded, contracted
Kinds of Bill of Exchange: (2)
Foreign Bill
Domestic Bill
Where a warehouseman delivers the goods to one who is not in fact lawfully entitled to the possession of them.
Liability for Misdelivery
2 Kinds of individual money lender
– Those who grant loans as personal accommodation to friends and relatives as a term of gratitude.
– Those who make the lending of money a profitable business.
It is a “bailment of goods” by a debtor to his creditor to be kept till the debt is discharge.
Pledge
advances use for agricultural
development that provides a favorable environment for a built market for the many products of country’s industries.
Agricultural Credit
these are loans to farmers, the purpose of the said
loan is to finance the planting, improvement and harvesting of
agricultural products.
Agricultural Loans
All movable which are within the commerce of man may be pledged, provided they are susceptible of possession.
Object of Pledge
(2) Other types of Mortgage
Close-end Mortgage
Open-end Mortgage
4 Types of Commercial Establishment
- Retail Stores
- Grocery and Department Stores
- Supermarkets
- Pawnshop
2 Types of International Organization
World Bank
International Monetary Fund