If a Retailer Regularly Sells Its Receivables to a Factor

question 111

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)operating expense.
• B)interest expense.
• C)other expense.
• D)contra asset.

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Definitions:

Protistan

Refers to any member of a diverse group of eukaryotic microorganisms, which are neither plants, animals, nor fungi, including algae, amoebas, and protozoans.

Salt Water

Water that contains significant amounts of dissolved salts, typically found in oceans and seas.

Freshwater Organism

A living entity that inhabits water bodies with low salt content, such as lakes, rivers, and ponds.

Semipermeable Membrane

A membrane that allows the passage of certain small molecules or ions but blocks others.