If Receivables Are Used as Collateral in Borrowing Transactions

question 72

Multiple Choice

If receivables are used as collateral in borrowing transactions,

• A) the receivables generally come under the control of the lender.
• B) a liability is reported on the borrower's statement of financial position.
• C) the receivables will be reported as a liability.
• D) the transaction would be reported as a sale.

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Definitions:

Civil Code of 1804

Also known as the Napoleonic Code, it was a comprehensive set of laws introduced by Napoleon Bonaparte to France that influenced legal systems worldwide.

Directory

A form of government or administrative structure, specifically referencing the five-member committee that governed France from 1795-1799 during the later stages of the French Revolution.

Consulate

A government system or office where officials represent their country in a foreign city, chiefly dealing with administrative matters and assisting their nationals.