Asked by Natalia Portugal on Jul 06, 2024
Verified
Receivables may be sold because they may be the only reasonable source of cash.
Reasonable Source
A credible or reliable origin of information or data that is considered acceptable or trustworthy for making decisions or drawing conclusions.
Sold Receivables
The process of a company selling its receivables to a third party to improve its cash flow.
- Ascertain the outcomes of selling receivables on a business's cash resources.
Verified Answer
CE
Cristian EscobedoJul 12, 2024
Final Answer :
True
Explanation :
If a company needs immediate cash and cannot obtain it through other means such as borrowing or equity financing, selling receivables may be the best option. This is because the receivables represent future cash inflows that the company can convert into cash by selling them to a third party.
Learning Objectives
- Ascertain the outcomes of selling receivables on a business's cash resources.
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