Which of the Following Statements Is True Concerning How Derecognition

question 103

Multiple Choice

Which of the following statements is true concerning how derecognition of receivables is treated under IFRS and U.S.GAAP?

• A)U.S.GAAP permits partial derecognition; IFRS does not.
• B)The criteria used to derecognize a receivable under IFRS uses a combination of an approach focused on risks and rewards and loss of control.
• C)The criteria used to derecognize a receivable under U.S.GAAP uses risks and rewards as the primary criterion.
• D)All of the choices are true regarding derecognition of receivables under IFRS and U.S.GAAP.

---

Definitions:

Goods of the Kinds

Products or items that are characteristic of what is described in a contract, conforming to expectations based on trade and usage.

Machinery on Approval

A sales agreement condition where the buyer can return the machinery if it doesn't meet specified requirements or expectations.

Insolvent

A financial state in which an entity is unable to pay its debts as they come due.

Claims

Demands for something due or believed to be due, often used in the context of insurance or legal cases.