When Pledging Accounts Receivables, Which of the Following Statements Is/are

question 61

Multiple Choice

When pledging accounts receivables, which of the following statements is/are correct?
I.Pledging requires permission of the SEC.
II.In pledging accounts receivables, the firm loses title to the receivables and they are no longer listed on the balance sheet.

• A)Only statement I is correct
• B)Only statement II is correct
• C)Both statements I and II are correct
• D)Neither statement I nor II is correct

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Definitions:

Marginal Cost

The elevated cost associated with manufacturing an additional unit of a product or service.

Competitive Firm

A company that operates in a market where it competes against other firms for market share and customers.

Long-run Equilibrium

A state in which supply equals demand, and all firms in the market are operating at an efficient scale with no incentive to enter or exit.

Minimum ATC

The point at which a firm's average total cost is at its lowest, typically considered in the context of the long-run average cost curve.