The only way for a firm to make use of its accounts receivable in orde

QUESTION

The only way for a firm to make use of its accounts receivable in order to generate short-term funds is by selling them.

Indicate whether the statement is true or false.

ANSWER

Answer: FALSE
Explanation: There are two ways firms can make use of their accounts receivable in order to generate short-term funds: by selling them, known as factoring, and by borrowing against them, known as pledging.