Accounts receivable may be used as a source of financing by
A) pledging the receivables as loan collateral.
B) factoring the receivables to a finance company.
C) selling securities backed by the receivables.
D) all of the other answers are correct

Question

Quizplus · Accepted Answer

All of the given options, A, B, and C, are valid ways of using accounts receivable as a source of financing. Pledging the receivables as loan collateral involves using them as security for a loan, while factoring the receivables involves selling them to a finance company at a discount in exchange for immediate cash. Selling securities backed by the receivables involves packaging them into securities and selling them to investors.

Accounts Receivable May Be Used as a Source of Financing