Practice
Check your answer
Write your response and explain your reasoning.
The factor takes collection and wires cash, but Linden Peak can substitute receivables, must repurchase specified defaults, and has no legal-isolation opinion covering its consolidated affiliate. Map the transaction and give the strongest bounded conclusion.
Compare your reasoning with the worked answer
Cash and collection transfer do not prove sale accounting. Resolve the specified interests, legal isolation, transferee rights, and effective control using all agreements and a scoped current legal opinion; otherwise preserve conditional sale and borrowing branches.