When the Transferee Retains the Right to Pledge Transferred Receivables

question 45

Multiple Choice

When the transferee retains the right to pledge transferred receivables

• A)the transaction would not qualify as a sale.
• B)the transferee has surrendered control
• C)the transferee has not surrendered control.
• D)(a) and (c)

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Definitions:

Double-Entry System

An accounting technique that records each transaction as both a debit and a credit in different accounts, ensuring the accounting equation remains balanced.

Transaction

Any event or activity that affects the financial position of a company and can be measured reliably in monetary terms.

Accounts

Records that summarize all the transactions related to a specific financial aspect, such as assets, liabilities, equity, expenses, and income.

Basic Accounting Equation

Assets = Liabilities + Owner’s equity.