1. An entity transferred financial assets to another entity. The transfer meets the conditions to be accounted for as a sale. The transferor should do each of the following, except A. Remove all assets sold from the statement of financial position. B. Record all assets received and liabilities incurred as proceeds from the sale. C. Measure the assets received and liabilities incurred at cost. D. Recognize any gain or loss on the sale.

2. Accounts Receivable are receivables supported by written or formal promises to pay in the form of promissory note A. True B. False

3. If accounts receivable are pledged against borrowings, the amount of accounts receivable pledged should be excluded from total receivables with disclosure. A. True B. False

4. If financial assets are exchanged for cash and other considerations but the transfer does not meet the criteria for a sale, the transferor and the transferee should account for the transaction as: I. Secured borrowing II. Pledge of collateral A. I only B. II only C. Both I and II D. Neither I nor II

5. Which of the following is not an objective in accounting for transfer of financial assets? A. To derecognize assets when control is gained. B. To derecognize liability when extinguished. C. To recognize liability when incurred. D. To derecognize assets when control is given up.

6. All but one of the following are required before a transfer of receivables can be recorded as a sale. A. The transferred receivables are beyond the reach of the transferor and its creditors. B. The transferor has not kept effective control over the transferred receivables through a repurchase agreement. C. The transferor maintains continuing involvement. D. The transferee can pledge or sell the transferred receivables

7. Assignment is the financing arrangement that is usually done on a "without recourse, notification basis) A. True B. False

8. Accrued income is an income not yet earned but already collected. A. True B. False

9. After being held for 30 days , 120 day 12% interest bearing note receivable was discounted at a bank at 15%. The amount received from the bank is equal to maturity value less discount at 12%. A. True B. False

10. The entity usually uses receivable financing to accelerate access to amounts collected. A. True B. False