Accounts Receivable May Be Used as a Source of Financing

question 105

Multiple Choice

Accounts receivable may be used as a source of financing by

• A) pledging the receivables as loan collateral.
• B) "factoring" the receivables to a finance company.
• C) selling securities backed by the receivables.
• D) All of these options are correct.

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Definitions:

Straight-Line Depreciation

A technique for laying out the expense of a solid asset over its viable life in consistent annual segments.

Initial Investments

The upfront expenses incurred when starting a new project, business, or investment.

Income Taxes

Taxes levied by governments on the income generated by businesses or individuals within their jurisdiction.

Income Tax Expense

The cost of taxes a company must pay based on its earnings, which can affect its net income and financial statements.