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Credit and Collection Midterm Quiz 2

The document discusses key aspects of credit investigations and analysis. It covers verifying an applicant's personal and credit reputation through third parties, classifying property types, estimating property value through appraisal, a credit investigator's responsibilities in analyzing clients, and ensuring accurate information is obtained to make appropriate credit decisions. The questions serve to test understanding of central concepts and responsibilities in the credit analysis process.

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Santi Seguin
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3K views7 pages

Credit and Collection Midterm Quiz 2

The document discusses key aspects of credit investigations and analysis. It covers verifying an applicant's personal and credit reputation through third parties, classifying property types, estimating property value through appraisal, a credit investigator's responsibilities in analyzing clients, and ensuring accurate information is obtained to make appropriate credit decisions. The questions serve to test understanding of central concepts and responsibilities in the credit analysis process.

Uploaded by

Santi Seguin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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The goal of the investigation is to obtain factual and accurate information that will

lead to an appropriate credit decision. 

Select one:
True
False
Verification of the applicant’s personal and credit reputation can be done through
third-party inquiries.

Select one:
True
False
Immovable properties are classified as either agricultural, residential, commercial, or
industrial.

Select one:
True
False
A property of appraisal is an estimate of

Select one:
a.
Cost
b.
price 
c.
Credit limit
d.
collection
 I.  Credit investigators are responsible for      performing credit analysis of clients

  II. Credit investigators work for bank, credit management companies, trading
organizations granting credit

Select one:
a.
Only first statement is true
b.
Only second statement is true
c.
Both statements are true
d.
Both statements are false
 The following items enumerated below are instances of fraud, except

Select one:
a.
Property claims on government land
b.
 Land with torrens title
c.
Spurious titles
d.
 Mortgaging a title that does not belong to the borrower
An appraisal of prospective borrower's ability and willingness to repay a loan, carried
out by a credit analyst is

Select one:
a.
Credit investigation

b.
Credit score
c.
Credit rating
d.
Credit application
 A property that is not owned and not possessed by the borrower is unacceptable as
collateral.

Select one:
True
False
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?

Select one:
a.
P  8,000,000
b.
 P  9,000,000
c.
P 10,800,000
d.
P 12,000,000
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.
Select one:
True
False
 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

Appraise the creditors’ ability to pa

Select one:
a.
I & II only
b.
I only
c.
I, II, III & IV
d.
I, II & III only
They are responsible for performing credit analysis of clients.

Select one:
a.
creditor
b.
Debtor
c.
credit collector
d.
credit investigator
 In the appraisal of machinery and equipment, the original invoice or historical cost is
considered in determining the appraised value of this method.

Select one:
a.
Replacement cost
b.
 Percentage of acquisition cost
c.
Zonal valuation
d.
Market value

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

Select one:
True
False
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
Select one:
a.
P 4,275,000
b.
P 3,000,000
c.
P 4,050,000
d.
P 4,500,000
t 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.

Select one:
True
False
Ownership and possession of properties presented as collateral need not be verified.

Select one:
True
False
Spurious titles of property can be accepted as collateral to obtain credit.

Select one:
True
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.
Select one:
a.
Both statements are true
b.
Only first statement is true
c.
Only second statement is true
d.
Both statements are false

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