When Accounts Receivable Are Pledged as Collateral Rather Than Factored

question 243

True/False

When accounts receivable are pledged as collateral rather than factored, the lender assumes the default risk on the receivables.

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Definitions:

Hygiene Factors

Elements related to job satisfaction which, if absent, can lead to dissatisfaction but do not necessarily motivate employees if present, such as company policies and working conditions.

Herzberg's Motivation-Hygiene Theory

A theory suggesting that job satisfaction and dissatisfaction arise from different sets of factors, where motivation factors increase satisfaction and hygiene factors prevent dissatisfaction.

Motivation

Refers to the factors and forces that drive an individual to engage in particular behaviors or pursue certain goals.

Satisfying

Fulfilling or meeting expectations, needs, or desires.