Aardvark Is a Small Pest-Control Business That Has 30 Employees

question 175

Multiple Choice

Aardvark is a small pest-control business that has 30 employees. The company started business within the past year, and needs to make a decision on how best to make sure its finances are managed well as the company continues to grow its customer base and its business. Aardvark needs some quickly obtainable funds to pay some overdue bills. It is considering using factoring-obtaining cash in exchange for outstanding accounts receivable funds. Which of the following, if true, would strengthen the case for using factoring?

• A) Factoring can be a costly way to obtain ready cash.
• B) Aardvark would not have to liquidate any of its core assets to stay in business.
• C) Customers may be annoyed if they think their account has been turned over to a collection agency.
• D) Additional accounting practices are necessary to keep track of factored customer accounts.
• E) Factoring companies usually won't take on receivables more than 90 days old.

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Definitions:

Planetary Gearset

A compact and efficient gear system that consists of one central gear (sun gear), several outer gears (planet gears), and a ring gear, used in various automatic transmissions and mechanical devices.

High Resistances

Refers to elevated levels of electrical resistance within circuits, which can lead to reduced current flow, inefficiencies, and potential overheating.

Voltage Drop Testing

A diagnostic method used to locate resistance or issues in an electrical circuit by measuring the voltage loss between two points under a load condition.

Ohmmeter

An electrical instrument used to measure the resistance of a component or circuit, aiding in troubleshooting and electrical work.