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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 → strong EWS of diversion

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