Asked by Ramon Gonzalez on Apr 29, 2024
Verified
Which of the following is true regarding pledged receivables?
A) They are collateral for a loan.
B) Uncollected accounts are usually the responsibility of the lender.
C) The process involves factoring.
D) Both a & b
Pledged Receivables
Assets owed to a company that have been used as collateral for a loan or other financial agreement.
Loan Collateral
Security that a borrower offers a lender to secure a loan.
Uncollected Accounts
Accounts receivable that have not yet been paid by customers, representing outstanding debts owed to a business.
- Comprehend the origins of short-term financial solutions and their associated expenses.
Verified Answer
SA
Syed Abdullah AhmedMay 04, 2024
Final Answer :
A
Explanation :
Pledged receivables are used as collateral for a loan, meaning that if the borrower fails to repay the loan, the lender can seize those receivables to recover their losses. Option B is not entirely true as uncollected accounts are still the responsibility of the borrower but may have consequences for the loan agreement. Option C is not accurate as pledging receivables does not necessarily require factoring.
Learning Objectives
- Comprehend the origins of short-term financial solutions and their associated expenses.
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