1. A predetermined amount withheld by a factor as a protection against customer returns, allowances and other special adjustments.

A. service charge

B. equity in assigned accounts

C. factor's holdback

D. loss on factoring

2. Subsequent to initial recognition, a loan receivable shall be measured at

A. Cost

B. Amortized cost using the straight line method

C. Amortized cost using the effective interest method

D. Fair value

3. Long-term interest bearing notes receivable shall be initially measured at

A. Face value

B. Present value

C. Maturity value

D. Amortized cost

4. When a promissory note is dishonored

A. Account receivable is credited

B. Accounts payable is credited

C. Notes receivable is debited

D. Interest income is credited

5. A financing arrangement usually done in a without recourse, notification basis.

A. pledge

B. discounting

C. assignment

D. factoring

6. If there is evidence that an impairment loss on loan receivable has been incurred, the loss is equal to excess of ______over the _____

A. carrying amount of loan; present value of cash flows related to the loan

B. present value of loan; carrying amount of loan

C. carrying amount of loan; principal amount of loan

D. principal amount of loan; carrying amount of loan

7. Long term notes receivable which bears no interest or minimal interest should be recognized initially at:

A. face value

B. maturity value

C. present value

D. current value

8. If accounts receivable is pledged against borrowings, the amount of accounts receivable pledged should be:

A. included in total receivables without disclosure

B. included in total receivables with disclosure

C. excluded from total receivables without disclosure

D. excluded in total receivables with disclosure

9. Initially, loans and receivables are measured at:

A. fair value

B. maturity value

C. fair value plus transaction costs that are directly attributable to the acquisition

D. maturity value plus transaction costs that are directly attributable to the acquisition

10. A financing arrangement whereby one party formally transfers its rights to accounts receivable to another party in consideration for a loan.

A. pledge

B. assignment

C. discounting

D. factoring