If a Company Sells Its Accounts Receivables to a Factor

question 140

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:

Rail Industry

The sector of the economy dedicated to the operation of rail transportation, including companies that operate trains and manage rail infrastructure.

Labor Organizations

Groups formed by workers to promote and protect their rights and interests, including trade unions.

American Federation of Labor

A national federation of labor unions in the United States, established in 1886, that aimed to organize skilled workers into national unions according to their crafts.

Industrial Workers

Individuals employed in sectors focused on the production and manufacturing of goods, often distinguished by their involvement in physically intensive or machinery-centric tasks.