When Accounts Receivables Are Used as Collateral, the Process Is

question 189

True/False

When accounts receivables are used as collateral, the process is called factoring accounts receivable.

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Definitions:

Inventory Levels

Inventory levels refer to the amount of goods or materials a company holds for the purpose of resale or production.

Total Manufacturing Costs

Total manufacturing costs encompass the sum of direct labor cost, direct materials cost, and manufacturing overhead costs incurred in the production of goods.

Direct Materials

Raw materials that are directly traceable to the production of specific goods.

Manufacturing Overhead

All manufacturing costs except direct materials and direct labor, including expenses such as rent, utilities, and depreciation on manufacturing facilities.