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.

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Definitions:

Corporate Governance

The system of rules, practices, and processes by which a company is directed and controlled, involving the balance among the interests of a company's stakeholders.

Strategic Management

The procedure of developing, executing, and assessing decisions across different functions to help an organization meet its goals.

Oversight and Accountability

Involves the processes and structures in place to monitor actions, ensure responsibilities are met, and hold individuals or organizations responsible for their actions and outcomes.

Corporate Governance

The framework of rules, practices, and processes by which a company is directed and controlled, focusing on the interests of its stakeholders.