When pledging accounts receivables, which of the following statements is/are correct?
I. Pledging requires permission of the SEC.
II. In pledging accounts receivables, the firm loses title to the receivables and they are no longer listed on the balance sheet.
A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements I and II are correct.
D) Neither statement I nor II is correct.

Question

When pledging accounts receivables, which of the following statements is/are correct? 
I. Pledging requires permission of the SEC.
II. In pledging accounts receivables, the firm loses title to the receivables and they are no longer listed on the balance sheet.
A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements I and II are correct.
D) Neither statement I nor II is correct.

Quizplus · Accepted Answer

Pledging accounts receivables does not require permission from the SEC, and when a company pledges its receivables, it retains title to them; they remain listed on the balance sheet as assets. Pledging is essentially using the receivables as collateral for a loan without transferring ownership.

When Pledging Accounts Receivables, Which of the Following Statements Is/are