If company sells its accounts receivables to a factor (such as a finance company), which of the following is not true: O a. the selling company credits accounts receivable for the face value of the A/R sold. O b. the selling company is no longer responsible for collecting cash from the customers. O c. the selling company records a contra revenue for the fee paid to the factor. O d. the selling company pays a service charge (usually a percent of the A/R sold) to the factor.

If company sells its accounts receivables to a factor (such as a finance company), which of the following is not true: O a. the selling company credits accounts receivable for the face value of the A/R sold. O b. the selling company is no longer responsible for collecting cash from the customers. O c. the selling company records a contra revenue for the fee paid to the factor. O d. the selling company pays a service charge (usually a percent of the A/R sold) to the factor.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Ceres Corporation made travel advances to the marketing team. Why are they considered nontrade receivables? The amounts are owed to the employees, not to the company. The amounts owed to the company did not result from selling goods or services. The amounts owed to the company are not from external parties. O The amounts owed will not cause a decrease in the Cash account.
Which of the following is not an accurate description of the Allowance for Doubtful Accounts? Multiple Choice The account is a contra account. The account is a liability. The amount of the Allowance for Doubtful Accounts decreases the net realizable value of a company's receivables. The account is increased by an estimate of uncollectible accounts expense.
At the time companies write off accounts receivable, there is no effect on net income. true or false
When the allowance method of recognizing bad debt expense is used, the entries at the time collection of an account previously written off would a. Decrease the allowance for doubtful accounts b. Increase net income c. Have no effect on the allowance for doubtful accounts d. Have no effect on net income
how do companies account for bad debt? Why would they use an allowance account instead of directly crediting A/R? What are the various methods of accounting for bad debt? Describe the differences in how the expense is calculated.
Trade receivables include employee advances. occur when two companies trade or exchange notes receivables. can be accounts receivable or notes receivable. do not result from the operations of the business.
37- Promissory notes are not used in one of the following situation a. When the business borrows money b. When the business makes settlement of accounts receivables c. When the business make sales d. When the period of credit exceed the normal limits
18 - The entity made a discount due to the premature payment of the receivable arising from the sale it made on credit. In which account and how should this transaction be recorded? A) Domestic Sales account receivable B) Sales Discounts account receivable C) To the debt of the Domestic Sales accountD) To the debt of General Administrative Expenses accountE) To the debt of Sales Discounts account
19.Which of the following statements is incorrect? a. Trade receivables are recognized simultaneously with the recognition of related revenue when the criteria for revenue recognition are met. b. Under the gross price method, sales discounts are reported as a deduction from sales revenue. c. When accounts receivable are pledged against borrowing, the amount of accounts receivable pledged shall be included in the total receivables with disclosures. d. When discounting notes, the term discount period refers to the period of time that the note has been held by the endorser or payee; i.e. the period from the date of the note up to the date of discounting.
May you please help me determine which of the following statements are false?
Which of the following statements is false? O A. A positive cash conversion cycle means the company is paying its payables before receiving its receivables. B. A negative cash conversion cycle means the company is collecting its receivable before paying its payables. C. The cash conversion cycle is the length of time required for the company to recieve its inventory and then receive cash from the sales of its inventory. D. All of the above statements are true.