Pledging Accounts Receivable

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.