Accounting for the Pledging of Accounts Receivable as Collateral for a Loan

question 116

Multiple Choice

Accounting for the pledging of accounts receivable as collateral for a loan requires:

• A) Reporting the receivables net of the borrowed amount.
• B) Removal of the pledged receivables from current assets and including them with noncurrent investments.
• C) Disclosure of the arrangement in notes to the financial statements.
• D) None of these answer choices are correct.

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