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

Question

Quizplus · Accepted Answer

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.

Which of the Following Is True Regarding Pledged Receivables