TechCom Factored $35,000 of Its Accounts Receivable and Was Charged

question 78

True/False

TechCom factored $35,000 of its accounts receivable and was charged a 2% factoring fee. The journal entry to record this would include a debit to Cash of $35,000; a debit to Factoring Fee Expense of $700; and a credit to Accounts Receivable of $35,700.

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Definitions:

Relevant Range

The range of activity within which the assumptions about variable and fixed cost behavior hold true.

Laser Printers

Printers that produce high-quality text and graphics by using a laser beam to transfer toner to paper.

Screen Printing

A printing technique that utilizes a mesh to transfer ink onto a substrate, except in areas made impermeable to the ink by a blocking stencil.

Variable Cost

Costs that vary in direct proportion to changes in the level of production or sales volume.