Which of the following is a benefit of accounts receivable financing?
A) The volume of borrowing can be quickly expanded proportionally in order to match a firm's growth in sales and accounts receivable.
B) It is a low cost way of financing.
C) Pledging receivables may increase a firm's ability to borrow from a bank.
D) It considers the time value of money.

Question

Quizplus · Accepted Answer

Accounts receivable financing allows a company to quickly increase its borrowing capacity in line with its sales growth, as the financing is directly tied to the value of the receivables.

Which of the Following Is a Benefit of Accounts Receivable