Which of the Following Is Not a Requirement for Recognizing

question 74

Multiple Choice

Which of the following is not a requirement for recognizing that a transaction can be recorded as a sale of receivables?

• A) The factor discounts the amount remitted to the seller.
• B) The selling company does not maintain effective control over the receivables.
• C) The factor has the ability to pledge the receivables.
• D) The receivables are isolated from the selling company.

---

Definitions:

Cash Investments

Money put into financial instruments or assets with the expectation of achieving a profit.

Statement of Cash Flows

A financial report that details the inflows and outflows of cash for a business over a specific period, highlighting operations, investing, and financing activities.

Financing Activities

Transactions related to raising, repaying, or managing the long-term capital and funding of an entity, reflected in the cash flow statement.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and profits.