Credit Laws and Ethics Quiz

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Questions and Answers

What is the safest guideline for credit professionals during informal meetings after industry credit meetings?

  • To provide detailed information about upcoming credit decisions
  • To discuss future plans with caution
  • To limit conversations to past events and refuse to talk about the future (correct)
  • To share credit limits and changes based on past performance

What is the recommended approach for giving trade references?

  • To provide a detailed verbal reference
  • To discuss credit limits and changes based on past performance
  • To refuse to supply references at all
  • To provide a bare bones written reference in return for a written request (correct)

What is the potential problem for credit professionals during industry credit meetings?

  • Lack of attendance
  • Being too cautious
  • Not having enough information
  • Breaking the law (correct)

What is a good reason for participating in an industry credit group?

<p>To stay alert of customers in financial difficulty (B)</p>
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What can happen when a customer gets into financial difficulty?

<p>They pick and choose whom to pay (A)</p>
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What is the risk of not performing annual credit reviews on customers with good paying habits?

<p>Not knowing if the customer has deteriorated financially (C)</p>
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What is the danger of reasoning that, since your product has high margins, you can afford to not get paid for one shipment?

<p>Preferences are not taken into account (A)</p>
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What is a bustout?

<p>A situation where a customer closes its doors and disappears leaving unpaid creditors behind (C)</p>
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What are unclaimed property laws also known as?

<p>Escheat laws (C)</p>
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What do some credit professionals do with credit balances instead of researching them?

<p>Ignore them and keep them as miscellaneous income (A)</p>
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Why are unclaimed property laws becoming a prime target for states?

<p>To generate income (A)</p>
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