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.

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Definitions:

Labor

The physical and mental effort used to produce goods and services.

Normal Good

A good for which demand increases when consumer income rises, and decreases when consumer income falls.

Inferior Good

A type of good whose demand decreases when consumer income rises, contrary to normal goods, which see increased demand as incomes rise.

Inferior Good

A type of good whose demand decreases when the income of consumers increases.