Since Pledged Accounts Receivables Only Serve as Collateral for a Loan

question 84

True/False

Since pledged accounts receivables only serve as collateral for a loan and are not sold, it is not necessary to disclose the pledging.

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Definitions:

Warehousing

The process of storing goods in a large building until they are sold or distributed.

Source of Financing

The means through which funds are provided to businesses for operating capital or growth, including loans, investment, or earnings.

Float

Money tied up in the check-clearing process.

Check Clearing

Check clearing is the process through which banks verify and process the transfer of funds from the check issuer's account to the recipient's account, finalizing the transaction.