When a Borrower Instructs Its Customers to Pay Their Invoices

question 2

True/False

When a borrower instructs its customers to pay their invoices directly to the lender, the arrangement is called, "Pledging with notification."

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Definitions:

Equity Method

An accounting technique used to record the investments in other entities where the investor has significant influence but not full control.

Outstanding Stock

The number of shares of a corporation that have been issued and are currently owned by shareholders.

Net Income

The amount of profit remaining after all expenses, including taxes and interest, have been deducted from total revenues.

Valuation Allowance

An accounting technique used to offset or reduce the carrying value of certain tax assets if it's more likely than not that they will not be realized.