Asked by Mitchell Kramer on Jul 05, 2024
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What are the 5 Cs of credit? List and give a brief description of each.
Credit Cost Curve
The relationship between the cost of credit for a borrower and the default risk of the borrower, indicating how the cost of borrowing money increases with higher risk.
Collection Policy
Guidelines and procedures a company follows to collect payments from customers including when and how collections are pursued.
Aging Schedule
An aging schedule is a method used in accounting to categorize accounts receivables based on the length of time an invoice has been outstanding, aiding in the management of a company's debts.
- Describe the 5 Cs of credit and their significance in credit assessment.
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Learning Objectives
- Describe the 5 Cs of credit and their significance in credit assessment.
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