Accounts Receivable or Inventory Usually Secures Short-Term Secured Loans

question 116

True/False

Accounts receivable or inventory usually secures short-term secured loans.

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Definitions:

Periodic Inventory System

An inventory accounting system where updates to the inventory accounts are made periodically, typically at the end of an accounting period, rather than continuously.

Physical Inventory

A detailed listing of merchandise on hand.

Perpetual Inventory System

An accounting method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Merchandise Inventory Account

An account that records the value of goods that a retailer, wholesaler, or distributor has available for sale to customers at any given time.