1. Credit concepts Aa Aa E Match the terms relating to the basic terminology and concepts of providing and obtaining credit on the left with the descriptions of the terms on the right. Read each description carefully and type the letter of the description in the Answer column next to the correct term. These are not necessarily complete definitions, but there is only one possible answer for each term. Term Answer Description Seasonal dating A. Collection policy Credit standards B. C. The face value of the loan includes both the amount received and the calculated interest. Banks often require this to offset loss if an owner or manager dies. If payment is not received by a certain date, many firms will employ a collection agency to collect overdue accounts. Often, banks will require the owners of a small business to sign personally for the debt of the company. Cash discounts D. Loan guarantees E. Collateral F. G. This type of discount induces customers to stock up early, accelerating a firm's sales and saving storage costs. An example of this credit policy decision is "2/10, net 30." If the borrower cannot repay the loan, the lender can liquidate certain assets. This is a loan in which the borrower prepays the interest. Key-person insurance D H. Discount interest loan I. Compensating balances Firms evaluate the likelihood of a customer being unable to pay on their account. Add-on interest D ). A borrower is required to hold a certain amount of money in an account at the lender's institution