What are the major sources that lenders can use for repayment of business loans:

1. The borrowers net worth
2. The borrowers retained earnings
3. The borrowers goodwill
4. The borrowers cash flow
5. The borrowers assets pledged as collateral

Which of the following ratios that banks can use to examine the borrowers liquidity?

1. Current assets/current liabilities
2. Current assets/total assets
3. Cost of goods sold/net sales
4. Income before interest and taxes/interest payment
5. Costs of goods sold/inventory

To make provision for bad debts, which of the following journal entries is correct?

1. Debit the profit and loss, and credit the bad debt account
2. Debit the project and loss account, and credit provision on the bad debt account
3. Debt the provision account and credit the bad debt account
4. Debt the provision and credit the account of the individual customers.