Sample Accounting Paper on The Use of Credit

Use of Credit

In the inculcation of a profound of program that revolves around the use of credit should include the notion of debt management. In the issuance of credit, caution should be taken on the credit history of a person.  The bad credit history entails an individual who is deemed to have a high stance of defaulting regarding the payments to the credit facilities advanced to them. Additionally, the program should inculcate the notion of cost-benefit analysis of the credit being advanced to a person.  In this prospect, it is imperative to note that when acquiring a credit facility, the cost of debt should be lower than the interest on the investment from the loan that has been taken.  The main reason for this notion is that there should be higher benefits than the costs regarding credit creation and advancement.

Another pertinent issue that should be noted about the credit acquiring is a profound definition of the role of the credit after the acquisition.  It is always encouraged that you only purchase credit when there is a substantial need.  The need is should be deemed to enrich the borrower both financially and economically. Furthermore, even as one opts to borrow, they should have an efficient source of funds where they would be deemed to repay the credit effectively.  The lower the amount of origin, the lower the amount that one is expected to get as a credit facility. According to bankruptcy laws, being declared bankrupt is the last resort person can utilize.  This accentuation is because, the moment one is declared bankrupt, they cease to have their freedom of borrowing.  The personal assets that someone has will be managed by the trustee who will use them to pay your creditors.  In this advent one will not be allowed to have any substantial assets hence their economic growth would diminish.