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      Question

      A CC account shows frequent excess drawings, decline in stock levels, delays in statutory payments and high turnover in sister concerns. These indicators mainly suggest:

      A Seasonal stress Correct Answer Incorrect Answer
      B Temporary liquidity issue Correct Answer Incorrect Answer
      C Potential diversion of funds Correct Answer Incorrect Answer
      D Over-financing by bank Correct Answer Incorrect Answer
      E Accounting mismatch Correct Answer Incorrect Answer

      Solution

      Multiple red flags together โ†’ strong EWS of diversion

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