What is debt, what is the cost of debt, and what are several characteristics of debt that many people do not recognize?
What will be an ideal response?
Debt is money that you have not yet earned. Debt allows you to buy things now instead of waiting until you have saved enough cash to pay for them. It is simply money that belongs to others that they are willing to let you use for a period of time. The fee to use their money is called interest. Normally, interest is listed as a rate or percentage of the amount borrowed. There may be other fees attached to various types of debt, such as loan origination fees, late fees, and so forth, but the most common fee is the interest rate percentage that you pay to use (borrow) someone else's money. Unfortunately, many people do not recognize all the different characteristics of debt. Whether you have to begin paying it back right away or get to wait until later, it is debt. So-called 6-month or 12-month same-as-cash offers are debt. Even though you are allowed to pay off the whole balance within a certain time-frame and not pay any interest, you still owe the money. Sometimes debt comes with zero percent interest. For instance, some car dealerships offer 0% financing on new vehicles. Is this still debt? Of course it is. You have the car but have not yet paid for all of it. Even if you are not required to pay any interest you must pay back what you borrowed. Zero percent interest loans are still debt. Likewise, consolidating debt is not paying it off. Using a home equity loan to pay off several credit cards does not eliminate the debt. Paying the money you owe somebody, with the promised amount of interest, is the only way to actually pay off your debt.
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Fill in the blank(s) with correct word
According to the text, the core principles of professional selling:
A. substitutes the word "relationship marketing" for "personal selling." B. includes the word "unselfishly." C. relates to transactional marketing. D. excludes e-selling. E. excludes telemarketing activities.
A cost management system should
a. identify and evaluate new activities. b. determine whether the organization is effective and efficient. c. identify the cost of consumed resources within the organization. d. all of the above.
At the end of a period, before the accounts are adjusted, Allowance for Doubtful Accounts has a debit balance of $2,000. If the estimate of uncollectible accounts determined by aging the receivables is $30,000, the current provision to be made for uncollectible accounts expense is $30,000
Indicate whether the statement is true or false