Management and Organizational Studies 2277A/B Chapter Notes - Chapter 6: Cash Flow Statement, Payment Card Number, Credit History

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2277A/B
• Professor: Barry Hawn

Document Summary

Credit: represents funds provided by a creditor to a borrower that the borrower will repay with interest or fees in the future. Funds borrowed are sometimes referred to as the principal. Credit is extended to borrowers as a loan with set terms, such as the amount of funds provided and the maturity date. Provided for specific purchases (also referred to instalment credit) The amount borrowed is repaid on a regular basis over a period of time (usually a few years) Loan repayments are made according to a specific repayment schedule. Interest and principal payments are blended, meaning each payment includes both principal and interest. Some instalment loans allow borrowers to pay interest only on maturity date. Balloon payment: the payment made at loan maturity. Credit card, or a line of credit, allows consumers to borrow up to a specified maximum amount based on income, debt level, credit history.