The main source of collateral for companies like accounting firms and law firms is

Question

Quizplus · Accepted Answer

The main source of collateral for accounting firms and law firms is accounts receivable. This is because their main assets are the fees that they charge for services rendered, and these fees are often invoiced and collected at a later date. Banks and other lenders may be willing to provide loans or lines of credit to these firms based on the expected cash flow from accounts receivable. Equipment and buildings may also be used as collateral, but they are not as significant as accounts receivable. Goodwill is an intangible asset that cannot be used as collateral. Accounts payable are liabilities owed by the firm, and cannot be used as collateral.

The Main Source of Collateral for Companies Like Accounting Firms