The stock exchange halted trading in Learning Co stock late on Wednesday afternoon pending news, and the Cambridge, Massachussets-based company issued a statement to clear up questions about its accounting practices. The statement also said the Learning Co remained committed to the purchase of Broderbund.

Many analysts also said worries about the Learning Co's accounting practices were unfounded. Bob Peterson, an analyst at Piper Jaffray, called the accounting fears ``much ado about nothing.''

Shares of The Learning Co dropped $5.13 to $20.63 and were among the most active on the New York Stock Exchange. Market sources said Pacific Crest Securities analyst Jeff Goverman questioned the way the Cambridge, Massachussets-based software developer was handling collections of accounts receivable. Goverman did not return calls seeking comment.

Shares of Broderbund were also down, falling $4 per share to $16.38 on the NASDAQ. Traders feared any accounting problems at the Learning Co could muck up its proposed merger with the San Rafael, California-based game and educational software company.

Peterson said he expected the Learning Co and Broderbund stock to rebound on Thursday, and added that he plans to reiterate a strong buy rating on The Learning Co.

In its statement, the Learning Co gave a detailed explanation of various facilities in which it sold accounts receivable to third parties. It said the facilities would not affect its financial results, and did not increase or decrease accounts receivables. It added that they had been disclosed in recent filings with the US Securities and Exchange Commission.

``I can tell you that the concerns that this analyst at Pacific Crest had appear to be unfounded,'' said Stephen Fleming, a BancAmerica Robertson Stephens analyst. ``There was some minor shift'' in the Learning Co's balance sheet, he said, ``but for the most part, the balance sheet is in good shape and this whole thing today was a tempest in a teapot.''

The confusion was over accounting practices called the factoring of accounts receivable. Factoring refers to the selling off of accounts receivable to a so-called factoring company.

The factoring company buys the receivables without recourse, which means that if the accounts become unpayable, the factoring company cannot turn to The Learning Co for the funds owed.

In the United States, the company's $75 million factoring facility had a balance of $70 million at the end of the quarter. In June, The Learning Co established an overseas factoring facility of $25 million. The overseas is with recourse, meaning that the Learning Company could be held liable for these accounts, should they default.

``The recourse factor means it stays on the company's balance sheet,'' Peterson said, adding that there is ``nothing fishy, nothing funny'' going on.