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Questions and Answers
What happens to bank loans in the United States with more than ninety days' arrears?
What happens to bank loans in the United States with more than ninety days' arrears?
- They are provisioned for
- They are classified as problem loans (correct)
- They are considered as bad debts
- They are immediately written off
Which of the following is a reason why a creditor may not take action to collect a bad debt?
Which of the following is a reason why a creditor may not take action to collect a bad debt?
- The creditor is not aware of the debt
- The creditor does not want to put in the effort to collect
- The debtor has the money to pay but refuses to do so
- The debtor is in the process of going into liquidation (correct)
What can cause a high bad debt rate for a business?
What can cause a high bad debt rate for a business?
- Ineffective credit and collections process (correct)
- Thorough credit checks of new customers
- Effective credit and collections process
- Proactive collections team
According to accounting sources, what should be done with a bad debt?
According to accounting sources, what should be done with a bad debt?
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What can lead to a company facing the risk of a high bad debt?
What can lead to a company facing the risk of a high bad debt?
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