If a Company Usually Sells Its Accounts Receivable, It Records

question 38

Multiple Choice

If a company usually sells its accounts receivable, it records any factoring commissions as a(n)

• A)loss
• B)expense
• C)receivable
• D)liability

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Definitions:

Treasury Stock

Shares that were issued and subsequently reacquired by the company, reducing the amount of outstanding stock on the open market.

Income Statement

A financial report summarizing the revenues, costs, and expenses incurred during a specific period, typically a fiscal quarter or year.

Income Before Taxes

The total revenue a company generates minus the total expenses before income tax expense is subtracted; an indicator of a company's pre-tax profitability.

Earnings Per Share

A financial ratio that indicates the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of a company's profitability.