Pledging Accounts Receivable as a Source of Short-Term Credit

question 131

Multiple Choice

Pledging accounts receivable as a source of short-term credit

• A) is a type of loan secured by accounts receivable.
• B) is a form of spontaneous credit.
• C) involves the outright sale of accounts receivable to a financial institution.
• D) is an inexpensive but risky source of short-term financing.

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Definitions:

Job Cost Sheet

A document that records the materials, labor, and manufacturing overhead costs assigned to an individual job or project.

Cost Accounting

A branch of accounting focused on capturing a company's total cost of production by assessing its variable and fixed costs.

Product Costs

Costs directly attributable to the creation of a product, including direct labor, materials, and manufacturing overhead.

Period Costs

Costs that are expensed in the period in which they are incurred, rather than being capitalized or included in the cost of goods sold.