Receivables Can Be Used to Generate Cash Through Two General

question 65

Essay

Receivables can be used to generate cash through two general categories of transactions:
1.A secured borrowing
2.A sale of the receivables.
Both of these types of transactions require a transfer of the receivables to a new holder,typically a financial institution.
A sale of receivables results in the receivables being removed from the books of the transferor and the recognition of gain or loss.From the transferee's standpoint,a sale of receivables results in the receivables being recorded on its books at their fair value.
Required:
Identify the conditions that must exist for a transfer of receivables to be accounted for as a sale.

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Definitions:

Sixteen Personality Factors Questionnaire

A self-report inventory developed by Raymond Cattell to assess sixteen personality traits.

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A psychological condition in which individuals feel they are less valuable or worthy than others, often resulting in decreased confidence.

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