In Deciding Whether Financing with Receivables Is a Secured Borrowing

question 137

Multiple Choice

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

• A) The transferee has received substantially all the risks and rewards of ownership.
• 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.

---

Definitions:

Respond Time

The duration taken to reply or react to a communication or request.

Groupthink

A phenomenon where the desire for harmony or conformity in a group results in an irrational or dysfunctional decision-making outcome.

Unpopular Opinions

Views or beliefs that diverge from the majority consensus within a community or society.

Harmony

A pleasing combination or arrangement of different parts that creates a consistent, orderly, or aesthetically appropriate result.