In Certain Circumstances a Company May Find It Necessary to Accelerate

question 42

Essay

In certain circumstances a company may find it necessary to accelerate the cash inflows potentially generated from its accounts receivable.This can be accomplished through pledging, assigning, or factoring the accounts receivable.
Required:
Explain each of these arrangements.Include in your discussion an explanation of each agreement, who retains the risks and benefits of ownership, whether or not the agreement is formally recorded in the company's accounting records, and how the agreement is disclosed in the company's financial statements.

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Definitions:

Agitated

Refers to a state of nervousness or unrest often characterized by physical movements or emotional upset.

Conflicting Feelings

Emotional experiences that are at odds with each other, often causing confusion or distress.

Characteristic Pattern

A consistent and observable behavior or feature repeated in a similar way across different contexts or situations.

Personality

The blend of features that constitute a person's individual identity.