The Sale of Receivables by a Business

question 171

Multiple Choice

The sale of receivables by a business

• A) indicates that the business is in financial difficulty.
• B) is generally the major revenue item on its income statement.
• C) is an indication that the business is owned by a factor.
• D) can be a quick way to generate cash for operating needs.

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Definitions:

Rate Of Return

The percentage gain or loss on an investment relative to the amount of money invested.

Stocks

Financial instruments that represent ownership in a company and signify a claim on part of the company's assets and earnings.

Long-Term Investor

An individual or entity that holds investments for an extended period, focusing on long-term performance rather than short-term gains.

Equity Mutual Fund

A type of mutual fund that invests primarily in stocks, aiming to generate returns through equity ownership in companies.