Question

If you borrow money from a lending institution and agree to pay back the original amount plus the accrued interest, what does it signify?
A.
credit from the lending institution
B.
you are a creditor in the Lending institution’s account
C.
the lending institution has debited its account
D.
your personal account shows cash outflow
E.
lending institution shows cash inflow

Answer 1

Answer:

Option A.

Explanation:

Bank credit refers to the total amount of credit which is available to an individual or a business from a banking institution. It is the total amount of combined funds which financial institutions can provide to an individual or business.

A business or an individual's credit approval will depend on the following:

- borrower's credit rating,

- income,

- collateral,

- assets,

- pre-existing debt,

- total amount of credit available in the banking institution, etc.