The Sale of Receivables by a Business

question 155

Multiple Choice

The sale of receivables by a business

• A)indicates that the business is in financial difficulty.
• B)is generally the major revenue item on its income statement.
• C)is an indication that the business is owned by a captive finance company.
• D)can be a quick way to generate cash for operating needs.

---

Definitions:

Job-Order Costing System

A cost accounting system in which costs are assigned to specific jobs or orders, used in industries where goods or services are produced to order.

Machine-Hours

A measure of production time which quantifies the number of hours a machine is in operation.

Overhead Applied

The portion of overhead costs that are allocated to products or cost objects based on a predetermined overhead rate.

Customizing Department

A segment within a manufacturing or service company dedicated to modifying products or services to meet specific customer requests or needs.