Vance Co. is required to provide collateral in order to obtain a long-term business loan. Which of the following would not be acceptable collateral to most lenders?
A) Stocks
B) Liabilities
C) Land
D) Equipment
E) Inventory

Question

Quizplus · Accepted Answer

Liabilities refer to the debts or obligations of a company, and they are not considered suitable collateral to secure a loan. This is because they do not represent any tangible asset that can be seized or liquidated in case of a default. On the other hand, stocks, equipment, land, and inventory are all tangible assets that can be used as collateral, as they can be sold or seized to recover the loan amount if needed.

Vance Co Is Required to Provide Collateral in Order to Obtain