Assets that have been pledged as security for a loan:
A)Are reported as liabilities on the balance sheet.
B)Must be sold when the loan matures.
C)Become the property of the lender until the loan is paid in full.
D)Are disclosed in the notes to the financial statements.

Question

Quizplus · Accepted Answer

Assets that have been pledged as security for a loan are disclosed in the notes to the financial statements. They are not reported as liabilities on the balance sheet and they do not become the property of the lender until the loan is paid in full. They may or may not have to be sold when the loan matures depending on the terms of the loan agreement.

Assets That Have Been Pledged as Security for a Loan