Which of the Following Is an Example Where Derecognition of a Financial

question 4

Multiple Choice

Which of the following is an example where derecognition of a financial instrument is NOT justified?

• A)The contractual rights to cash flows from the financial asset have expired.
• B)The entity has transferred the financial asset so that it no longer has control of the asset.
• C)Sale of short-term receivables by an entity accompanied by a guarantee to compensate the purchaser for any credit losses that are likely to occur.
• D)The entity has transferred the financial asset in such a way that it is no longer subject to the risks and rewards of ownership.

---

Definitions:

Intelligence Quotient

A score derived from standardized assessments designed to measure human intelligence and cognitive abilities.

Bell Curve

A graphical representation of a normal distribution of data, shaped like a bell, often used in statistical analysis.

Schematic Drawing

A simplified representation of an idea, object, or system, used to understand or explain its structure or function.

Most Direct

Refers to the simplest or straightest path or method to achieve something without detours or intermediaries.