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 these.

Question

Quizplus · Accepted Answer

All of these options may be used to finance using accounts receivable. Pledging the receivables as collateral may allow a company to secure a loan. Factoring the receivables involves selling them to a finance company for immediate cash, and selling securities backed by the receivables involves issuing bonds or other securities that are backed by the income generated by the receivables.

Accounts Receivable May Be Used as a Source of Financing