If a Company Sells Its Accounts Receivables to a Factor

question 89

Multiple Choice

If a company sells its accounts receivables to a factor

• A) the seller pays a commission to the factor.
• B) the factor pays a commission to the seller.
• C) there is a gain on the sale of the receivables.
• D) the seller defers recognition of sales revenue until the account is collected.

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Definitions:

Technological Determinism

The theory that technology shapes and determines the development of human social structure and cultural values.

Normal Accidents

The concept that in complex systems, accidents are unavoidable and inherent due to the intricate interactions and dependencies of system components.

Capital Investment

Money spent by a business entity to acquire or upgrade physical assets such as property, industrial buildings, or equipment to increase its long-term revenue.

Technical Experts

Individuals possessing specialized knowledge or skills in a specific field or technology, often consulted for their expertise.