A Company Sells $900,000 of Accounts Receivable to a Factor

question 28

Multiple Choice

A company sells $900,000 of accounts receivable to a factor for cash less a 2% service charge. The entry to record the sale should not include a

• A) debit to Interest Expense for $18,000.
• B) debit to Cash for $882,000.
• C) debit to Service Charge Expense for $18,000.
• D) credit to Accounts Receivable for $900,000.

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Definitions:

Transference

A phenomenon in psychoanalysis in which a patient redirects feelings and desires, often unconsciously, from a person in their past to a new object, usually the therapist.

Gain-Loss Theory

A psychological concept suggesting that a person's attraction to others increases with signs of increasing interest from them, and decreases with signs of disinterest or hostility.

Halo Effect

A cognitive bias in which an observer's overall impression of a person, product, or company influences their feelings and thoughts about that entity's character or properties.

Mate Selection

This process involves choosing a partner for romantic or sexual relationships, based on various factors such as personal preferences, social norms, and evolutionary influences.