Alpha Inc Has Receivables from Unrelated Parties with a Face Value

question 48

Multiple Choice

Alpha Inc. has receivables from unrelated parties with a face value of $5,000. It transfers these receivables to bank for $4,500, without recourse. It will continue to collect the receivables, depositing them in a non-interest-bearing bank account with the cash flows remitted to the bank at the end of each month. It is not allowed to sell or pledge the receivables to anyone else and is under no obligation to repurchase the receivables from bank. Which of the following is the appropriate treatment for these Accounts receivables?

• A) It should show these receivables in its Balance Sheet.
• B) It should amortize these receivables.
• C) It should derecognize these receivables.
• D) It should derecognize these receivables if it retains the interest earned on these.

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Definitions:

Meta-Analysis

A statistical method that combines the results of multiple studies addressing a set of related research hypotheses.

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A type of psychotherapy that involves offering encouragement, support, and hope to patients in a non-judgmental way.

Effect Sizes

A quantitative measure of the magnitude of a phenomenon or the strength of relationship between variables, often used in statistical analysis to understand the importance of study findings.

Core Motive

The fundamental driving force or underlying goal behind an individual's actions and behaviors.