Ambiguity Can Arise as to Whether Receivables Have Been Sold

question 40

Multiple Choice

Ambiguity can arise as to whether receivables have been sold or instead are being used as collateral for a loan whenever certain obligations,duties,or rights regarding the transferred receivables are retained by the transferor.In distinguishing between sales and collateralized borrowings using receivables,the critical issue

• A)is whether the terms regarding the transfer were initiated by the transferor or transferee.
• B)is whether the transferor surrenders control over the receivables.
• C)comes down to how clearly the rights,etc.being retained are specified in the transfer agreement.
• D)is whether any gain or loss related to the transfer is recognized in earnings.

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Definitions:

Social Readjustment Rating Scale

A scale that measures the amount of stress in a person's life resulting from major life changes or adjustments.

Approach-avoidance

A conflict or situation where a single goal or option has both appealing and negative aspects to it, leading to ambivalence.

Social Readjustment Rating Scale

A scale that measures the stress levels of different life events to predict their impact on an individual's health.

Inherently Stressful

Referring to situations, tasks, or conditions that are naturally predisposed to causing stress or tension.