A Company Factored $30,000 of Its Accounts Receivable and Was

question 177

True/False

A company factored $30,000 of its accounts receivable and was charged a 2% factoring fee. The journal entry to record this transaction would include a debit to Cash of $30,000, a debit to Factoring Fee Expense of $600, and credit to Accounts Receivable of $30,600.

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Definitions:

Supporting Consideration

Consideration provided by a party in a contract that underpins the agreement, ensuring it is legally binding.

Assignee

An individual or entity to whom rights or interests have been transferred by another.

Repudiate

To reject or deny the validity of a contract, agreement, or statement.

Modern Law

Contemporary legal systems and statutes that are in effect in a jurisdiction, reflecting current values and societal norms.