A Company Factored $45,000 of Its Accounts Receivable and Was

question 116

Multiple Choice

A company factored $45,000 of its accounts receivable and was charged a 4% factoring fee.The journal entry to record this transaction would include a:

• A)Debit to Cash of $45,000,a debit to Factoring Fee Expense of $1,800,and a credit to Accounts Receivable of $46,800.
• B)Debit to Cash of $45,000 and a credit to Accounts Receivable of $45,000.
• C)Debit to Cash of $43,200,a debit to Factoring Fee Expense of $1,800,and a credit to Accounts Receivable of $45,000.
• D)Debit to Cash of $46,800 and a credit to Accounts Receivable of $46,800.
• E)Debit to Cash of $45,000 and a credit to Notes Payable of $45,000.

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Definitions:

Collaboration

The act of working together with one or more individuals to complete a task or achieve a goal.

Exchange

The act of giving one thing and receiving another, especially of the same type or value, in return.

Exchange Tactic

A strategy used in negotiations or interactions, where one party offers something in return for something from the other party.

Explicit Offers

Direct and clear proposals or opportunities presented by one party to another, leaving little to no room for misunderstanding or ambiguity.