The Process of Using Accounts Receivable as Security for a Loan

question 32

True/False

The process of using accounts receivable as security for a loan is known as factoring accounts receivable.

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Definitions:

Overhead Applied

The allocation of overhead costs to specific jobs or activities based on a predetermined rate.

Job P505

This likely refers to a specific job or project identifier within an organization or accounting system but without context, its specific significance can vary.

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or services, calculated in advance based on estimated costs and activity levels.

Direct Labor-hour

An alternative term for direct labor-hours indicating the individual hours of labor directly involved in the production process, crucial for cost calculation.