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.

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.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 10MC

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Similar questions

This transfer of financial asset does not result to derecognition. A. The transferred asset has been isolated from the transferor (put beyond reach of the transferor and its creditors) B. The transferees have obtained the right to pledge or exchange either the transferred assets or beneficial interests in the transferred assets C. The transferor is obliged to repurchase the transferred financial asset D.The transferor does not maintain effective control over the transferred assets through an agreement to repurchase or redeem them before their maturity
Why Do Transferors of Receivables Generally Want to Account for the Transfer as a Sale?
Which one of the following is not an indicator of the transfer of control to the buyer? Group of answer choices Seller has transferred physical possession of property. Seller has legal title to the asset. Seller has present right to payment for the asset. Customer has accepted the asset.
When a note payable is exchanged for property, the stated interest rate is presumed to be fair when A. The stated interest rate is equal to the market rate.B. no interest rate is stated C. the stated rate is unreasonable.D. the face amount of the note is materially different from the cash sales price for similar property.
When assets are purchased under an installment sales contract, the seller becomes the creditor. True or False?
When a company sells an asset and simultaneously leases it back, what criteria must be met to apply saleleaseback accounting rather than accounting for the transaction as a loan ?
What are the reporting issues in a sale with a repurchase agreement?
When is the financial components approach to recordingthe transfers of receivables used? When should a transferof receivables be recorded as a sale?
When nonmonetary assets are exchanged, a company records the cost of the nonmonetary asset acquired at: a.The fair value of the nonmonetary asset surrendered minus cash paid. b.The book value of the asset received minus cash paid. c.The fair value of the nonmonetary asset surrendered plus cash paid. d.The fair value of the nonmonetary asset surrendered plus cash received.
In your own words, briefly explain a 'qualifying asset' and how we report exchange rate differences relating to the acquisition of qualifying assets? Contrast this with the treatment for assets that are not qualifying assets
When initially recognizing the cash surrender value, what is the reason behind the allocation between deducting from insurance expense and crediting to retained earnings? What application of the matching principle concept is used?
receivables not measured initially at their transaction price are measured initially ata. fair value plus transaction costs that are directly attributable to the acquisition of the financial assetb. fair valuec. fair value minus transaction costs that are directly attributable to the acquisition of the financial assetd. fair value less costs to sell