What do firms use to record the sales value of a transaction when a note receivable has either an unreasonable rate of interest or no interest ratestated?

A.Firms uses the cost of the goods or services provided plus amark-up to record the sales value of a transaction when a note receivable has either an unreasonable rate of interest or no interest rate stated.

B.

An observed market price is the most reliable evidence of anasset's fair value. If a company receives a note in exchange for goods orservices, assume thenote's present value is the fair value of the goods or services provided. Fair value estimates are based on the market value of the goods or servicesprovided, or the note. If a company cannot obtain the fair value of the goods orservices, the present value of the note is found using the market rate of interest.

C.

An observed market price is the most reliable evidence of anasset's fair value. Fair value estimates are based on the market value of the goods or servicesprovided, or the note. If a company cannot obtain the fair value of the goods orservices, the present value of the note is found using the stated rate of interest.

D.

Firms uses the face value of the note to record the sales value of a transaction when a note receivable has either an unreasonable rate of interest or no interest stated.

How do companies account for receivables that arefactored?

A.Receivables that are factored either with or without recourse should be accounted for as asale, or a secured borrowing. In order to be recognized as a securedborrowing, three conditions must be met.

B.

Receivables that are factored either with or without recourse should be accounted for as asale, or a secured borrowing. In order to be recognized as asale, three conditions must be met.

C.

Receivables that are factored with recourse should be accounted for as a sale. Receivables that are factored without recourse should be accounted for as a secured borrowing.

D.

Receivables that are factored without recourse should be accounted for as a sale. Receivables that are factored with recourse should be accounted for as a secured borrowing.