Pledging Accounts Receivable

question 187

Multiple Choice

Pledging accounts receivable:

• A)is similar to factoring in that the receivables no longer belong to the borrowing firm.
• B)may involve recourse which means that the borrower is responsible for losses from uncollectible accounts.
• C)always requires the lender to review each account individually and determine which ones are creditworthy before agreeing to a loan.
• D)is a relatively inexpensive form of financing.
• E)All of the above are correct regarding pledging accounts receivable.

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Definitions:

Standard Error

The statistical term that measures the accuracy with which a sample represents a population.

Mean

The arithmetic average of a set of numbers, calculated by adding them up and dividing by the count of numbers.

Confidence Interval

A spread of values, emerging from the statistical study of a sample, which has a likelihood of including the value of a non-disclosed population parameter.

Mean

The arithmetic average of a dataset, found by adding all the numbers in the set and dividing by the count of numbers.