Use the Following Information for Questions 35 and 36

question 122

Multiple Choice

Use the following information for questions 35 and 36.
During 2014 Carne Corporation transferred inventory to Nolan Corporation and agreed to repurchase the merchandise early in 2015. Nolan then used the inventory as collateral to borrow from Norwalk Bank, remitting the proceeds to Carne. In 2015 when Carne repurchased the inventory, Nolan used the proceeds to repay its bank loan.
-This transaction is known as a(n)

• A) consignment.
• B) installment sale.
• C) assignment for the benefit of creditors.
• D) product financing arrangement.

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