Under Securitization, a Company Sells Its Receivables in Batches at a Discount

question 124

True/False

Under securitization, a company sells its receivables in batches at a discount.

---

Definitions:

Reduced Comparability

A situation where differences in accounting policies or external factors make it difficult to directly compare financial statements across periods or entities.

Financial Statements

Documents that present an entity's financial activities and condition to users, including balance sheet, income statement, and statement of cash flows.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations by comparing its current assets to its current liabilities.

Disclosure Requirements

Regulations or standards mandating companies to reveal certain financial and non-financial information to maintain transparency and inform stakeholders.