In a Factoring Arrangement,the Factor

question 85

Multiple Choice

 In a factoring arrangement,the factor:

• A) takes no risk and sustains no losses.
• B) "buys" the accounts receivables of a firm.
• C) receives no interest payment.
• D) pays a premium for the firm's assets.

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Definitions:

Unit Product Cost

The total cost (both fixed and variable) to produce a unit of product, often used in pricing and decision-making processes.

Absorption Costing

A product costing approach within accounting that captures the entirety of manufacturing costs—direct materials, direct labor, and overheads, whether they are variable or fixed.

Variable Costing

A costing approach that solely incorporates variable manufacturing expenses such as direct materials, direct labor, and variable manufacturing overhead into the costs per unit of product.

Income Statement

A financial statement that provides a summary of a company's revenues, expenses, and profits over a specific period, indicating financial performance.