55. How do non-monetary exchanges affect the accounting records when commercial substance exists? a) At book value of assets given up b) At fair value of assets exchanged c) No entry required until sold d) At original cost basis

55. How do non-monetary exchanges affect the accounting records when commercial substance exists? a) At book value of assets given up b) At fair value of assets exchanged c) No entry required until sold d) At original cost basis

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 17GI: When does a company record the transfer of accounts receivable as a sale? As a secured borrowing (a...

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55.
How do non-monetary exchanges affect the
accounting records when commercial substance
exists?
a) At book value of assets given up
b) At fair value of assets exchanged
c) No entry required until sold
d) At original cost basis

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55.
Which of the following items is NOT classified as a financial asset? a. promissory notes b. forward exchange contracts c. inventory d. accounts receivable
When should a transfer of receivables be recorded as a sale? A) The buyer surrenders controlof the receivables to the seller. B) The transferor maintains effective control over the transferred assets through an agreement to repurchase or redeeem them prior to their maturity. C) The transferee cannot pledge or exchange the transferred assets. D) The transferred asstes are isolated from the transferor.
When does a company record the transfer of accounts receivable as a sale? As a secured borrowing (a liability)?
When cash is involved in an exchange having commercial substance _________________. a. a gain or loss is computed by comparing the fair value of the asset received with the fair value of the asset given up b. only gains should be recognized c. gains or losses are recognized in their entirety d. only losses should be recognized
ACCOUNTING: FOR A FACTORING ARRANGEMENT, DERECOGNITION OF RECEIVABLES OCCURS WHEN? A) AGREEMENT IS SIGNED B) SUBSTANTIALLY ALL RISKS AND REWARDS ARE TRANSFERRED C) PARTIAL PAYMENT IS RECEIVED D) COLLECTION IS GUARANTEED
The modified accrual basis ______. Multiple select question. What solution is it below? (A) records receivables (B) is merely a "light" version of the accrual version is not equivalent to the cash basis (C) accrues expenditures when payable (D) does not recognize long-term assets and liabilities
Which of the following is not a criterion to recognize revenue under GAAP? A. The earnings process must be completed. B. A product or service must be provided. C. Cash must be collected. D. GAAP requires that the accrual basis accounting principle be used in the revenue recognition process.
PAS 16 states that if an exchange transaction causes a significant change in cash flows, the transaction has commercial substance. In transactions of this type, at what amount should the entity record the asset received? Book Value plus Boot Book Value Fair Value inminsic value
2) Accounts receivable erroneously debited to note receivable Effect on retained earnings -Since these are asset accounts there exists no effect on net income of the entity. Can you explain this? Should it be retained earnings instead of net income?
23) The IFRS criteria for recognizing a transfer of a receivable focuses on which of the following? a)Risks b)Rewards c)Loss of control d) All of these answers choices are correct.
Which of the following is true when accounts receivable are factored without recourse? a. The transaction may be accounted for either as a secured borrowing or as a sale, depending upon the substance of the transaction. b. The financing cost (interest expense) should be recognized ratably over the collection period of the receivables. c. The receivables are used as collateral for a promissory note issued to the factor by the owner of the receivables. d. The factor assumes the risk of collectibility and absorbs any credit losses in collecting the receivables.