What Are the Advantages and Disadvantages of the Use of Factor-Rating

question 16

Essay

What are the advantages and disadvantages of the use of factor-rating schemes?

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Definitions:

Operating Income

Income generated from a company's primary business operations, excluding revenue and expenses from non-operating activities such as investments.

Revenue

The total income generated by a business from its operational activities, such as sales of goods or services, before any expenses are deducted.

Accrued Revenue

Represents the income that has been earned but not yet billed or received by the company.

Prepaid Expense

Payments made in advance for goods or services to be received in the future, recorded as assets on the balance sheet.