Question

Pledging receivables: A) Allows firms to raise cash. B) Allows a firm to retain ownership of its receivables. C) Does not transfer risk of bad debts to the lender. D) Should be disclosed in the financial statements. E) All of the above

Answer 1

E

Step-by-step explanation:

Pledging receivables is when the receivables are used as collateral during a financial arrangement. When a business uses it's business assets as collateral to gain a loan.

All the options in the question constitutes what pledging receivables consists. Therefore option E is the right answer.