As defined in Accounting Standards Codification, dollar purchase agreements are the agreements to sell and repurchase similar and identical securities.
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A. B.B
The statement is true.
A dollar purchase agreement, also known as a "repurchase agreement," is a contract in which the seller agrees to buy back securities from the buyer at a specific price and time. Essentially, it is a short-term loan in which the seller borrows money from the buyer and uses the securities as collateral. The buyer earns interest on the loan, and the seller gets the cash they need.
According to the Accounting Standards Codification, a dollar purchase agreement refers to an agreement to sell and repurchase similar and identical securities. This means that the seller agrees to sell securities to the buyer, and then repurchase the same securities at a later date and at a specific price. The securities must be identical to those sold, meaning that they have the same terms, conditions, and characteristics.
Therefore, the statement "As defined in Accounting Standards Codification, dollar purchase agreements are the agreements to sell and repurchase similar and identical securities" is true.