Answer:
The pledge of receivables as a security for a loan from the bank will be disclosed in the notes to the balance sheet.
Explanation:
If Company A pledges its Accounts Receivable as a security for a bank loan, then in the accounts receivable account description, a note is attached, stating the amount of the receivables pledged as collateral and the description of the loans for which they were pledged. Most times, a pledged asset can reduce the down payment that is required for a loan. It can also reduce the interest rate charged.
