A business owner wishes to arrange an asset-based loan with his bank.What accounting information will the bank required for this type of loan?
A) land and buildings
B) accounts receivable and inventory
C) equipment and buildings
D) inventory and equipment

Question

Quizplus · Accepted Answer

Asset-based loans are based on the value of a company's assets, such as accounts receivable and inventory. Therefore, the bank will require information about these assets to determine the loan amount and terms. Land and buildings (choice A and C) may be used as collateral for the loan, but may not be the primary focus of an asset-based loan. Equipment (choice C and D) may also be considered, but accounts receivable and inventory are typically the main assets used in this type of loan.

A Business Owner Wishes to Arrange an Asset-Based Loan with His