A Company Sells $800,000 of Accounts Receivable to a Factor

question 178

Multiple Choice

A company sells $800,000 of accounts receivable to a factor for cash less a 2% service charge. The entry to record the sale should not include a

• A)debit to Interest Expense for $16,000.
• B)debit to Cash for $784,000.
• C)debit to Service Charge Expense for $16,000.
• D)credit to Accounts Receivable for $800,000.

---

Definitions:

Degrees of Freedom

The number of values in the final calculation of a statistic that are free to vary.

Qualitative Variables

Variables that express qualitative attributes and differentiate by category, not in numerical terms.

Chi-Square Test

A nonparametric test used to determine if there is a significant association between two categorical variables.

Sampling Distribution

The probability distribution of a given random-sample-based statistic if you repeatedly sample from the same population.