In Deciding Whether Financing with Receivables Is a Secured Borrowing

question 26

Multiple Choice

In deciding whether financing with receivables is a secured borrowing or a sale, the critical element is the extent to which:

• A)The stated interest rates differ from market interest rates.
• B)The age of the receivables transferred differs from the average age of the receivables.
• C)The transferor of the receivable surrenders control over the assets transferred.
• D)The transferee relies on funds from the transferor to maintain operations.

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Definitions:

IADLs

Stands for Instrumental Activities of Daily Living, which are activities related to independent living, such as managing finances, transportation, and housekeeping.

ADL

Refers to Activities of Daily Living, which are routine activities people do every day without assistance, such as eating, bathing, dressing, toileting.

Self-sufficiency

The ability of an individual or community to meet their needs without external assistance, including producing food, goods, and services required for living.

Assisted Living

A residential option for seniors who need help with some daily activities like bathing, dressing, and medication management.