The Firm May Transfer the Accounts Receivable to a Legally

Multiple Choice

The firm may transfer the accounts receivable to a legally separate entity that issues debt securities to investors. Which of the following is/are true?

A) The firm remits to investors the cash received from customers as those cash receipts occur.
B) The firm may be obligated to make payments to investors in securities if the customers fail to make sufficient cash payments to pay the principal and interest on the debt securities.
C) The transfer is called securitization, a process that transforms an asset (accounts receivable) into securities held by investors.
D) all of the above
E) none of the above