The Pledging Cost of Accounts Receivable Is Normally 2 to 5

question 159

True/False

The pledging cost of accounts receivable is normally 2 to 5 percent above the prime rate.

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Definitions:

Invoice

A document sent by a seller to a buyer, detailing a transaction and requesting payment.

Payment

The action or process of paying someone or something or the amount paid.

Cash Discount

A discount allowed for a payment within the discount period.

Payment Terms

Conditions under which a seller will complete a sale, typically specifying the period allowed to a buyer to pay off the amount due.