Of the following conditions, which is the only one that is not required if the transfer of receivables with recourse is to be accounted for as a sale?
A) The transferor is obligated to make a genuine effort to identify those receiv?ables that are uncollectible.
B) The transferor surrenders control of the future economic benefits of the receivables.
C) The transferee cannot require the transferor to repurchase the receivables.
D) The transferor's obligation under the recourse provisions can be reasonably estimated.

Question

Quizplus · Accepted Answer

All the other conditions (surrender of control, non-requirement of repurchase, reasonable estimation of recourse obligations) are required for a transfer of receivables with recourse to be accounted for as a sale under generally accepted accounting principles. However, the obligation to identify uncollectible receivables is not specifically required for sale accounting, although it may be required for other reasons such as regulatory compliance or risk management.

Of the Following Conditions, Which Is the Only One That