Answered: If the transferor of receivables…

If the transferor of receivables surrenders control over them, the transaction involving receivables is treated as a sale, and any gain or loss is recognized in earnings. Select one: O True False

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 3Q: Is it true that, when one firm sells to another on credit, the seller records the transaction as an...

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Question

If the transferor of receivables surrenders control over them, the transaction involving receivables is treated as a sale, and any gain or loss is recognized in earnings.
Select one:
O True
False

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Similar questions

Is it true that, when one firm sells to another on credit, the seller records the transaction as an account receivable while the buyer records it as an account payable and that, disregarding discounts, the receivable typically exceeds the payable by the amount of profit on the sale?
When should a transfer of receivables be recorded as a sale? A) The buyer surrenders controlof the receivables to the seller. B) The transferor maintains effective control over the transferred assets through an agreement to repurchase or redeeem them prior to their maturity. C) The transferee cannot pledge or exchange the transferred assets. D) The transferred asstes are isolated from the transferor.
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Do U.S. GAAP and IFRS differ in the criteria they use to determine whether a transfer of receivables is treated as a sale? Explain.
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b) Explain why the cash book as an asset is not transferred to the realization account during dissolution?