Ans Rush Corporation borrowed $25,000 from the bank. Which of the following accurately shows theeffects of the transaction?a. Increase cash by $25,000 and decrease notes payable by $25,000.b. Increase cash by $25,000 and increase notes payable by $25,000.c. Decrease cash by $25,000 and decrease notes payable by $25,000.d. Decrease cash by $25,000 and increase notes payable by $25,000.

Explanation of Cash: Cash is a current asset that represents the most liquid form of funds available…

Answered: Rush Corporation borrowed $25,000 from…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter5: Internal Control And Cash

Section: Chapter Questions

Problem 2SEQ

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1. A company makes a sale to a customer on credit and borrows cash (70-90% of the amount of sales) from a bank using receivables as security. When the company receives the customer payment, it sends this money to the lender. This transaction is an example of what? Factoring with recourse Securitization Collateralized borrowing Nonrecourse factoring 2. Which of the following statements about the direct and indirect methods for presenting Cash Flow Statement is NOT true? According to the indirect method, cash flows begin with net income or loss and is followed by subsequent additions to or deductions from that amount for non-cash revenue and expense items, resulting in cash flow from operating activities. The direct method is based on use of actual cash inflows and outflows from a company’s operations. Using direct and indirect methods leads to different amounts shown as cash flow from operations, investing, and financing activities.…

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