When Firms That Are Temporarily Short of Cash and Unable

question 88

Multiple Choice

When firms that are temporarily short of cash and unable to borrow from usual sources convert accounts receivable into cash by pledging the accounts receivable, they disclose this information

• A)on the income statement, only.
• B)on the balance sheet, only.
• C)on both the income statement and the balance sheet.
• D)by a footnote to the financial statements.
• E)in managements' discussion and analysis.

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Definitions:

Exception

A case that does not follow the general rule or is different from what is usually found or expected.

Standards

Established norms or criteria that define the expected level of quality or performance.

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