Sale of receivables to a factor Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity. To describe: The reason behind the sale of receivables to factors, by Incorporation D.

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Answer 1

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Chapter 8, Problem 8.16E

To determine

Sale of receivables to a factor

Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity.

To describe: The reason behind the sale of receivables to factors, by Incorporation D.

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Answer 2

Question

Chapter 8, Problem 8.16E

To determine

Sale of receivables to a factor

Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity.

To describe: The reason behind the sale of receivables to factors, by Incorporation D.

Expert Solution & Answer

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Answer 3

Question

Chapter 8, Problem 8.16E

To determine

Sale of receivables to a factor

Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity.

To describe: The reason behind the sale of receivables to factors, by Incorporation D.

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Answer 4

Question

Chapter 8, Problem 8.16E

To determine

Sale of receivables to a factor

Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity.

To describe: The reason behind the sale of receivables to factors, by Incorporation D.

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Answer 5

Chapter 8, Problem 8.16E

To determine

Sale of receivables to a factor

Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity.

To describe: The reason behind the sale of receivables to factors, by Incorporation D.

Answer 6

Chapter 8, Problem 8.16E

To determine

Sale of receivables to a factor

Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity.

To describe: The reason behind the sale of receivables to factors, by Incorporation D.

Answer 7

Chapter 8, Problem 8.16E

To determine

Sale of receivables to a factor

Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity.

To describe: The reason behind the sale of receivables to factors, by Incorporation D.

Answer 8

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Answer 11

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Solution Summary: The author explains that Incorporation D sells its receivables to factors to improve its financial ratios, accelerate cash receipts when necessary, or avoid the collection process.

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