A firm decides to sell a pool of receivables to a factor with recourse (i.e. the firm selling the receivables must make payment to the buyer of the receivables in the event that the party that originally owes the money does not pay).  Under Current U.S. GAAP, which of the following statements is (are) true: A. The firm selling the receivables is prohibited from reporting any                            Gain or Loss on the sale.   B. Any cash received from such a transaction must be reported in the                             Financing Section of the Statement of Cash Flows.     C. Both Statements A & B are true.   D. None of the above statements are true

Why might a company prefer a foreign currency option rather than a forward contract in hedging a foreign currency firm commitment? Why might a company prefer a forward contract over an option in hedging a foreign currency asset or liability?

Reporting an investment at its fair value means adjusting its carrying amount for changes in fair value afterits acquisition (or since the last reporting date if it was held at that time). Such changes are called unrealizedholding gains and losses because they haven’t yet been realized through the sale of the security. If the security isclassified as available-for-sale, how are unrealized holding gains and losses typically reported?

11. Which is an incorrect scenario on covenants?a. The issuing firms pursued revenue generating projects to ensure payment of the interest and theprincipal on a timely basis.b. The issuing firm disposes a mortgage on a bond to settle other creditors’ claims to preventinsolvency.c. The issuing firm submitted periodic reports to the trustee bank to fulfill the loan agreement.d. The issuing firm disposed the collateral to settle the agreement with the bondholders.e. B & Df. All of the aboveg. None of the above   12. Statement 1: Bond issuers can take additional loans against the properties that were considered ascollaterals for the bonds.Statement 2: Bond issuers can impose the taxes paid for registering the bonds against on the interestand principal claims of the bondholders.Statement 3: Bond issuers can prioritize other claims of other creditors over the bondholders in casesof bankruptcy. Statement 4: Bond issuers can pay dividends of shareholders even though the bondholders were…

True or False? Unsettled foreign currency transactions, including financial instruments, shall be considered to contain embedded foreign currency derivatives under ASC 815 if the transactions meet all of the following criteria: They are monetary items.  They have their principal payments, interest payments, or both denominated in a foreign currency.  They are subject to the requirement …to recognize any foreign currency transaction gain or loss in earnings.   True  False

Fill in the blanks to complete   sentence. 8. ______bond ensures the repayment of the advance by the exporter in the event of the non-performance of his contractual obligations.

In accounting for lease contracts, companies reporting under U.S. GAAP are required to treat the cash payments as "rent expense" if the contract is for 24 months or less. O do not need to capitalize the leased right-to-use asset if the contract is deemed immaterial. O have the discretion to classify the cash payments as "rent expense". O have to disclose every detail of the contract in the footnotes to the financial statements.

19- Which statement is correct? a. All U.S. debt issues, private and public, must be registered with the SEC.b. Rarely is debt issued privately in the U.S.c. It is easier to renegotiate a public issue than it is a private issue of debt.d. Private placements generally have shorter maturities than term loans.e. A direct placement of debt generally has more restrictive covenants than a publicissue.

What problemsarise when a multinational company operates in acountry whose currency is not convertible?

The market flex provision in an underwriting/syndication agreement means that the underwriter/lead syndicator has the right to cancel the loan agreement.  True False