When a lender uses trust receipts in financing a borrower's inventory:

A) the specific units of inventory pledged as collateral are identified.
B) the lender has a general claim on all of the borrower's inventory.
C) the lender retains physical control over the inventory.
D) public warehouses are frequently utilized.

Trust Receipts

Documents acknowledging the receipt of goods by a trustee while detailing the terms of an agreement for selling or holding the goods.

Collateral

An asset backing a loan. In the event of default the collateral becomes the property of the lender to satisfy the obligation. Also called security for the loan.

Public Warehouses

Warehousing facilities operated by third parties that offer storage and handling services to the public for a fee.