Business Services-2 — OCM STD 11 Commerce — Question
Gujarat BoardEnglish MediumSTD 11 CommerceOCMBusiness Services-22 Marks
Question
What is Cash Credit ?
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Answer
Money lending to the businessmen for the purpose of expansion of business, keeping in consideration stock of goods in business, and the amount to be received is called cash credit.
Against this facility stock of goods of the merchant is mortgaged in the bank.
The interest is charged on the amount utilized by the borrower not on the entire amount sanctioned by the bank. The amount of overdraft used for specific fixed period becomes cash credit.
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