When a Company Factors Its Accounts Receivable, It

question 46

Multiple Choice

When a company factors its accounts receivable, it

• A) enters into a lending agreement with the institution to receive cash on specific customer accounts.
• B) sells individual accounts to a financial institution.
• C) uses these accounts only as a collateral for a loan.
• D) transfers the accounts but retains title of the accounts until the loan is paid.

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Definitions:

Single-speed

Refers to mechanisms or vehicles operating with only one gear ratio, without the ability to shift gears.

Two-speed

Describes a mechanism, such as a gearbox, with two operating speeds, allowing for a shift in performance or efficiency depending on the requirement.

Kingpin

A critical component in vehicle steering mechanisms or in the coupling between a trailer and a tractor, around which steering or pivoting occurs.

Steering Axles

Axles equipped with mechanisms to alter the direction of a vehicle's wheels, facilitating steering.