Which of the Following Is One of the Two Steps

question 45

Multiple Choice

Which of the following is one of the two steps of the 2-step test for derecognition of receivables stated in IAS 39,International Accounting Standard 39,"Financial Instruments: Recognition and Measurement"?

• A) The transferred assets have been isolated from the transferor such that the transferor and its creditors cannot access the assets.
• B) The transferee has the right to pledge or exchange the transferred assets.
• C) If the receivable transfer does not involve the transfer of substantially all the risks and rewards of ownership,then test to determine if the transferor maintains effective control over the assets through either an agreement to repurchase the assets before their maturity,or by the ability to cause the transferee to return specific assets.
• D) Determine whether the receivable transfer involves a transfer of substantially all the risks and rewards of ownership of the receivable and,if so,account for the transfer as a sale of the receivable.

Recognize period costs as either selling expenses or administrative expenses.

Understand the role of direct materials and direct labor in manufacturing.

Identify the various types of factory overhead expenses.

Recognize the significance of cost allocation in managerial accounting.

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Definitions:

Realty

Refers to real estate or real property, encompassing land and anything permanently attached to it, such as buildings.

Permanently Injures

Causes lasting physical or mental damage to a person, affecting their abilities or quality of life indefinitely.

Joint Tenants

A form of property co-ownership where two or more parties hold equal shares, and upon the death of one, the surviving joint tenant(s) automatically receive the deceased's share.

Heirs

Individuals legally entitled to receive property from a deceased person's estate under a will or through intestacy.