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OH Hardware Store factors $

OH Hardware Store factors $

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: acounting 

DH Hardware Store factors $100,000 of receivables to Friendly Factors Enterprise. Friendly Factors assesses a service charge of 2% on the factored receivables. The hardware store's required entry to record the factored receivables results in a $2,000 decrease in assets and a $2,00 increase in stockholders' equity. decrease in assets and stockholders' equity. decrease in liabilities and stockholders' equity. increase in liabilities and a $2,000 decrease in stockholders' equity.
Transcribed Image Text:DH Hardware Store factors $100,000 of receivables to Friendly Factors Enterprise. Friendly Factors assesses a service charge of 2% on the factored receivables. The hardware store's required entry to record the factored receivables results in a $2,000 decrease in assets and a $2,00 increase in stockholders' equity. decrease in assets and stockholders' equity. decrease in liabilities and stockholders' equity. increase in liabilities and a $2,000 decrease in stockholders' equity.
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