The Factoring of Receivables Involves the Specific Use of Receivables

question 31

True/False

The factoring of receivables involves the specific use of receivables as collateral for the loan.

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Definitions:

Parent Entity

A company that has control over one or more subsidiaries.

Company Tax Rate

The rate at which a company’s taxable income is taxed by the government, which varies by country and sometimes also by the type and size of the company.

Inventories

Goods owned with the intention to sell them through standard business activities, in the stage of being made for sale, or as parts or materials meant for consumption in production activities or while offering services.

Consolidation Worksheet

A tool used in the preparation of consolidated financial statements to combine the financial information of a parent company with its subsidiaries.