Irwin Has Applied for a Loan from an Asset-Based Lending

question 86

Multiple Choice

Irwin has applied for a loan from an asset-based lending company. As security, he will offer

• A) land and buildings.
• B) accounts receivable and inventory.
• C) equipment and buildings.
• D) inventory and equipment.

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Definitions:

Dividends

Payments made by a corporation to its shareholders, typically from profits.

Shareholder Equity

The residual interest in the assets of a company after deducting liabilities, representing the net worth attributable to shareholders.

Common Stocks

Shares representing ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends and/or capital appreciation.

Retained Earnings

Represents the portion of a company's profits not distributed as dividends to shareholders but instead reinvested in the business.