ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A sum of money that you pay at closing
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Percentage earned of sale price
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A loan which uses the equity in your house to secure you loan
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None of the above
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Detailed explanation-1: -A down payment is a sum of money that a buyer pays in the early stages of purchasing an expensive good or service. The down payment represents a portion of the total purchase price, and the buyer will often take out a loan to finance the remainder.
Detailed explanation-2: -A down payment is a cash payment made at the beginning of a purchase transaction. It is usually required by the seller of goods or services that are expensive and/or customized for the needs of the buyer. If the sale falls through, then the seller can keep the deposit and recognize it as revenue.
Detailed explanation-3: -A down payment invoice is a taxation-relevant document that records the receiving or paying of a down payment and is a base for various tax reports. For more information, see the pages A/R Down Payment Invoice or A/P Down Payment Invoice in the general online help provided with SAP Business One.
Detailed explanation-4: -Earnest money, sometimes called a “good faith deposit, ” is a sum of money that is included with your offer to purchase a home. Earnest money has become standard, especially in today’s competitive real estate markets.
Detailed explanation-5: -Down payment is calculated using the formula: down payment = down payment percent times purchase price. The down payment percent needs to be converted into a decimal for this calculation.