If a Retailer Regularly Sells Its Receivables to a Factor

question 7

Multiple Choice

If a retailer regularly sells its receivables to a factor the service charge of the factor should be classified as a(n)

• A) selling expense.
• B) interest expense.
• C) other expense.
• D) contra asset.

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Definitions:

Innocent Third-Party

An individual or entity that is not involved in a legal dispute or transaction but may be affected by its outcome.

Restrictive Employment Covenant

A promise by an employee in an employment contract not to work for anyone else in the same field of employment for a specified time period within a particular geographical area.

Employment Options

Various employment possibilities or choices available to individuals based on skills, experience, and qualifications.

Legal Part

A component or section of a statute, regulation, or agreement that deals with a specific legal issue.