When a Firm Pledges Its Accounts Receivable,if a Customer That

question 78

True/False

When a firm pledges its accounts receivable,if a customer that purchased goods from the firm does not pay,the selling firm must take the loss.

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Definitions:

Preferential Treatment

The act of giving priority or advantage to a particular person or group over others, typically in an unfair manner.

Creditors

Individuals or institutions to whom money is owed.

Bankruptcy Relief

Legal relief obtained through a court proceeding that allows individuals or organizations to eliminate or reorganize their debts.

State Law

Legislation that is enacted by the legislative bodies within each of the states in the United States, as opposed to federal law.