In a field warehouse arrangement for a loan against inventory:
A)the inventory is held in a public warehouse and must be transported to a firm's plant.
B)the inventory is kept on the firm's premises but is under the control of the warehouse manager.
C)the inventory is kept by the firm but is identified by a serial number for the lender's protection.
D)the borrower pledges inventory as collateral for a loan without specifying the exact items involved.

Question

Quizplus · Accepted Answer

In a field warehouse arrangement, the inventory is kept on the firm's premises but is under the control of an independent warehouse company's manager. This ensures the lender that the inventory, which serves as collateral for the loan, is not improperly used or sold without their knowledge.

In a Field Warehouse Arrangement for a Loan Against Inventory