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Pam Borrows $5,000 from Quality Auto Sales to Buy a Car

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Essay

Pam borrows $5,000 from Quality Auto Sales to buy a car.  When Pam does not pay the loan or return the car, Quality wants to transfer the right to the payment to Rapid Collection Agency. Rapid agrees to pay Quality for this right, but for a price that is less than the amount owed. Can Quality transfer this right to Rapid without Pam's consent? If so, and Quality committed fraud in the deal with Pam, could Pam legitimately refuse to pay Rapid? Explain.


Definitions:

General Journal

A primary accounting record where financial transactions are recorded in chronological order, detailing debits and credits for those transactions.

Analyzed

The process of examining and breaking down data or information in order to gain better insight and make informed decisions.

Chronological Record

A documentation of events in the order of their occurrence.

Source Documents

Original records that contain the details to support business transactions entered in an accounting system, like invoices, receipts, and contracts.

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