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:

Federal Commerce Commission

Likely refers to the Federal Trade Commission (FTC), a U.S. federal agency tasked with protecting consumer rights and ensuring a strong competitive market by enforcing antitrust and consumer protection laws.

Unfair Trade Practices

Business practices that mislead, deceive, or are unethical, potentially harming consumers or competitors.

Deceptive Trade Practices

Activities by businesses that mislead consumers or distort the truth about the products or services being offered.

Wrongful Charges

Wrongful charges refer to unfair or unjust accusations or fees imposed on an individual or entity without proper justification or evidence.