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Syllabus F2. Credit granting

Syllabus F2

Credit granting

a) Explain the importance of credit management, including the level of trade credit, the role of the credit control function and the activities of the credit control function.
b) Explain the need to establish a credit policy and outline the steps involved, including setting maximum credit amounts and periods and total credit levels.
c) Explain the key categories that should be considered when assessing the creditworthiness of a customer.
d) Outline the various internal sources of information that may be used in assessing the credit-worthiness of a customer.
e) Outline the various external sources of information that may be used in assessing the credit-worthiness of a customer. 
f) Define and explain credit scoring.
g) Identify possible reasons for rejecting an application for credit or extending credit.
h) Describe how the financial statements of a customer can be used to assess the creditworthiness of a customer.