Future Business Leaders of America (FBLA) Agribusiness Practice Test

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What are outstanding loans?

  1. Loans that have been fully paid

  2. Loans that are being repaid over time

  3. Loans that have not been paid yet

  4. Loans that have been forgiven

The correct answer is: Loans that have not been paid yet

Outstanding loans refer to those loans that have not yet been paid off by the borrower. This definition captures the essence of what an outstanding loan is, indicating that the borrower still has an obligation to repay the principal amount along with any accrued interest. Understanding outstanding loans is vital in financial management since they represent liabilities on the balance sheet of both individuals and businesses. Lenders track these loans to manage their risk and ensure that repayments are collected as scheduled. In contrast, other options describe different stages of loans. Fully paid loans indicate that the borrower has completed all payments, while loans being repaid over time refer to those currently in payment status but not fully paid off. Loans that have been forgiven denote instances where the lender has released the borrower from the obligation to repay a portion or all of the loan, which does not fit the definition of outstanding loans.

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