When a Firm (Assignor) Assigns Part of Its Accounts Receivable

question 15

Multiple Choice

When a firm (assignor) assigns part of its accounts receivable as collateral for a loan:

• A) The assignor relinquishes control over the receivables
• B) The transaction is essentially the same as factoring without recourse
• C) The assigned accounts are reclassified as a separate account within total accounts receivable
• D) The loan is offset against the assigned accounts receivable in the assignor's balance sheet

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