6. The FASB specified in Statement No. 140 three conditions that must be met if

Question

6. The FASB specified in Statement No. 140 three conditions that must be met if a transfer of receivables is to accounted for as a sale. Which of the following is not one of the three conditions specified?
a. The transferred assets have been isolated from the transferor.
b. The transferor's obligation under the recourse provisions can be reasonably estimated.
c. The transferee has the right to pledge or exchange the transferred assets.
d. The transferor does not maintain effective control over the assets through an agreement to repurchase the assets before their maturity.

ANS: ___________

7. Which one of the following statements is NOT correct?
a. The accounting function should be separated from the custodianship of a company's assets.
b. Certain clerical personnel in a company should be rotated among various jobs.
c. A company's personnel should be given well-defined responsibilities.
d. The responsibility of receiving merchandise and paying for it usually should be given to one person.

ANS:________

Explanation / Answer

6. B. The transferor's obligation under the recourse provisions can be reasonably estimated. 7. D. The responsibility of receiving merchandise and paying for it usually should be given to one person.

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