Current Assets Paper 1

1

According to ASC Topic 860, which of the following statements is true regarding servicing assets and servicing liabilities?
I. Either the amortization method or the fair value method can be used.
II. Once the fair value method is elected, the election cannot be reversed.
III. Changes in fair value are reported in other comprehensive income for the period.






2

Binsar Corporation transfers a financial asset but continues to hold an interest in the servicing asset. How should the interest in the servicing asset that continues to be held be measured at the date of the transfer?






3

Which of the following is true?






4

In accordance with accounting for transfers and servicing, all of the following would be disclosed except






5

Taft Inc. borrowed $1,000,000 from Wilson Company on July 2, year 8. As part of the loan agreement, Taft granted Wilson a security interest in land that originally cost $750,000 when it was acquired by Taft in year 1. The land had a fair value of $900,000 on July 2, year 8. In June year 9, Taft defaulted on its loan to Wilson, and the land was transferred to Wilson in full settlement of the debt on June 30. The land had a fair value of $950,000 on June 30, year 9. What amount should Wilson record for land on June 30, year 9?






6

If a firm is offered credit terms of 2/10, net 30 on its purchases. Sound cash management practices would mean that the firm would pay the account on which of the following days?






7

The following forms of short-term borrowings are available to a firm:
• Floating lien
• Factoring
• Revolving credit
• Chattel mortgages
• Bankers’ acceptances
• Lines of credit
• Commercial paper
The forms of short-term borrowing that are unsecured credit are






8

A company obtaining short-term financing with trade credit will pay a higher percentage financing cost, everything else being equal, when






9

Which of the following is not related to loans involving inventory?






10

The London Interbank Offered Rate (LIBOR) represents an example of a






Result

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