FASB Has Set Forth All of the Following Conditions for Recognizing

question 44

Multiple Choice

FASB has set forth all of the following conditions for recognizing transfers of receivables as sales only if the following conditions of surrendering control of the receivables are met except:

• A) The assets transferred have been isolated from the selling firm.
• B) The buying firm obtains the right to pledge or exchange the transferred assets, and no condition both constrains the transferee from taking advantage of its right and provides more than a trivial benefit to the transferor.
• C) The selling firm does not maintain effective control over the assets transferred through (a) an agreement that both entitles and obligates it to repurchase the assets or (b) the
• Ability to unilaterally cause the transferee to return specific assets.
• D) A creditor of the selling firm can access the receivables in the event of the seller's bankruptcy.

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Definitions:

Future Environments

Potential conditions and scenarios that individuals, organizations, or societies may face in the future.

Competitors

Other entities that offer similar goods or services within the same market as another entity, competing for the same clientele.

Product Consistency

The assurance that a product or service will be delivered in the same quality and standard across different units, times, or locations.

J.R. Simplot

An American entrepreneur and businessman known for founding the J.R. Simplot Company, a major agricultural supplier specializing in a variety of products, including potatoes for French fries.