Chapter 9

2. the recipient of credit
3. the price a borrower pays for the use of a lender’s money
6. the personal qualities of the credit applicant that demonstrate responsibility and dependability
7. the ability to make required payments
9. services provided by a financial services firm for a fee
10. an account that is no longer considered collectible
11. offered to individual consumers by a business
12. the amount of personal wealth the owners have invested in the business
14. the guidelines used by a company to determine if a customer is eligible for credit
15. an agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a later date
17. the steps a business follows to keep customer credit payments up to date and eliminate charge-offs
19. the sale of accounts receivable
20. the business extending credit; also known as the lender

1. a company administers its own credit program and assumes all credit risks and returns
4. a credit account that has not been paid by the designated date according to the credit terms
5. credit offered to a business customer by another business
7. characteristics making it highly likely that credit payments will be made on time and in full
8. the value of assets of the credit applicant that can back the request for credit
10. all accounts receivable by the length of time they remain unpaid
13. factors that are generally outside the control of the borrower or lender but that can affect the risk
16. The agreement between the borrower and lender regarding the interest rate and the time period of the loan
18. a written document describing the terms under which credit is granted and payment will be made