Receivables Might Be Sold to

question 132

Multiple Choice

Receivables might be sold to

• A) lengthen the cash-to-cash operating cycle.
• B) take advantage of deep discounts on the cash realizable value of receivables.
• C) generate cash quickly.
• D) finance companies at an amount greater than cash realizable value.

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Definitions:

Spin-Off

A type of corporate restructuring where a division or subsidiary becomes an independent company.

Consignment

An arrangement in which goods are left in the possession of another party to sell, with payment to the original owner occurring only after the sale.

Wharfage

A fee charged for the use of a wharf for loading or unloading cargo, or for the temporary storage of goods on the wharf area.

Sell-Off

Transaction in which assets are sold by one firm to another.