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.

Question

Quizplus · Accepted Answer

When receivables are used as collateral, the borrower retains control of the receivables, and a liability is reported on the borrower's financial statements to reflect the borrowing.

If Receivables Are Used as Collateral in Borrowing Transactions