The Sale of Receivables by a Business

question 153

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 factor.
• D)can be a quick way to generate cash for operating needs.

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Definitions:

Builders' Liens

Legal claims against a property by workers or suppliers who have not been paid for services or materials provided in the construction or improvement of that property.

Settlements

Agreements reached by parties in a dispute outside of court, often involving a compromise.

Consumer Proposal

A legal process in Canada allowing indebted individuals to negotiate a settlement with their creditors to pay back a portion of their debts.

Insolvent Debtor

An individual or organization that cannot pay their debts as they come due, often leading to bankruptcy proceedings.