If the transferor of accounts receivable cannot meet all conditions for a sale, the transferor records the proceeds received as a debit to Cash and records a corresponding credit to a(n)

Question

Quizplus · Accepted Answer

If the transferor cannot meet all conditions for a sale, the transferor cannot recognize the sale as true and complete. Therefore, the proceeds received must be recorded as a liability until all conditions are met. The credit will be recorded to a liability account.

If the Transferor of Accounts Receivable Cannot Meet All Conditions