Accounting for Loans and Leases 2023/2024 Verified Exam
Elaborations
What is generally the largest asset on a financial institutions balance sheet? - correct Answer - the loan
portfolio
How are bank typically categorized? - correct Answer - by the type of lending they specialize in
Amortization of Net Deferred Origination Fee - correct Answer - Interest Revenue - Accrued Interest
Receivable
- correct Answer -
Loans Secured by Real Estate are... - correct Answer - extensions of credit predicated upon a security
interest in real property.
Real estate loans include loans secured _____ or ______ by a lien on real property for which the lien is
______ to the extension of the credit. - correct Answer - wholly, substantially, central
Loans that include construction, land development, and other land loans as well as loans secured by
farmland with the primary collateral being buildings, fall under what type of loans? - correct Answer -
Loans Secured by Real Estate
Loans to Finance Agricultural Production and Other Farm Loans are... - correct Answer - used to fund the
production of crops, fruits, vegetables, and livestock, or to fund the purchase or refinancing of capital
assets such as farmland, machinery and equipment, breeder livestock and farm real estate
improvements.
What loan type includes loans to farmers for all other purposes associated with the maintenance or
operations of a farm, including the purchase of private passenger automobiles, and other retail
consumer goods and provisions for the living expenses of farmers and their families? - correct Answer -
Loans to Finance Agricultural Production and Other Farm Loans
, A loan is... - correct Answer - an extension of credit resulting from direct negotiations between a lender
and a borrower.
How have new loan types been developed? - correct Answer - To meet the varied funding needs of the
bank's market, lenders over the years have continually introduced new loan products based on customer
credit needs.
In what forms can a loan appear as? - correct Answer - promissory notes, overdrafts, acceptances, and
other small obligations.
How are some loans originated? - correct Answer - by direct negotiations with a borrower or it may
purchase a loan or a portion of a loan originated by another lender.
What are the four broad loan categories? - correct Answer - loans secured by real estate, agricultural
loans, commercial and industrial loans, and consumer loans.
How many broad loan categories are there? - correct Answer - Four
The types of loans offered at bank depends on the bank's _____ and ______. - correct Answer - location,
customer base
Commercial and Industrial loans are... - correct Answer - extensions of credit to business enterprises and
individuals for commercial, industrial, and professional purposes.
What can commercial and industrial loans NOT be used for? - correct Answer - investment or personal
expenditure purposes
Consumer loans include... - correct Answer - all extensions of credit to individuals for household, family,
and other personal expenditure that are not secured by real estate.
What types of loans are usually seen under consumer loans? - correct Answer - automobile loans, boat
and recreational vehicle loans, credit cards, other revolving credit plans, and student loans
Elaborations
What is generally the largest asset on a financial institutions balance sheet? - correct Answer - the loan
portfolio
How are bank typically categorized? - correct Answer - by the type of lending they specialize in
Amortization of Net Deferred Origination Fee - correct Answer - Interest Revenue - Accrued Interest
Receivable
- correct Answer -
Loans Secured by Real Estate are... - correct Answer - extensions of credit predicated upon a security
interest in real property.
Real estate loans include loans secured _____ or ______ by a lien on real property for which the lien is
______ to the extension of the credit. - correct Answer - wholly, substantially, central
Loans that include construction, land development, and other land loans as well as loans secured by
farmland with the primary collateral being buildings, fall under what type of loans? - correct Answer -
Loans Secured by Real Estate
Loans to Finance Agricultural Production and Other Farm Loans are... - correct Answer - used to fund the
production of crops, fruits, vegetables, and livestock, or to fund the purchase or refinancing of capital
assets such as farmland, machinery and equipment, breeder livestock and farm real estate
improvements.
What loan type includes loans to farmers for all other purposes associated with the maintenance or
operations of a farm, including the purchase of private passenger automobiles, and other retail
consumer goods and provisions for the living expenses of farmers and their families? - correct Answer -
Loans to Finance Agricultural Production and Other Farm Loans
, A loan is... - correct Answer - an extension of credit resulting from direct negotiations between a lender
and a borrower.
How have new loan types been developed? - correct Answer - To meet the varied funding needs of the
bank's market, lenders over the years have continually introduced new loan products based on customer
credit needs.
In what forms can a loan appear as? - correct Answer - promissory notes, overdrafts, acceptances, and
other small obligations.
How are some loans originated? - correct Answer - by direct negotiations with a borrower or it may
purchase a loan or a portion of a loan originated by another lender.
What are the four broad loan categories? - correct Answer - loans secured by real estate, agricultural
loans, commercial and industrial loans, and consumer loans.
How many broad loan categories are there? - correct Answer - Four
The types of loans offered at bank depends on the bank's _____ and ______. - correct Answer - location,
customer base
Commercial and Industrial loans are... - correct Answer - extensions of credit to business enterprises and
individuals for commercial, industrial, and professional purposes.
What can commercial and industrial loans NOT be used for? - correct Answer - investment or personal
expenditure purposes
Consumer loans include... - correct Answer - all extensions of credit to individuals for household, family,
and other personal expenditure that are not secured by real estate.
What types of loans are usually seen under consumer loans? - correct Answer - automobile loans, boat
and recreational vehicle loans, credit cards, other revolving credit plans, and student loans
