When Receivables Are Factored Without Recourse, the Transferor Generally

question 106

Multiple Choice

When receivables are factored without recourse, the transferor generally:

• A) Recognizes the cost of the transfer over the term of the related loan.
• B) Recognizes an immediate loss or expense and removes the receivables from the books.
• C) Records bad debt expense on the factored receivables.
• D) Makes no further entry for sales adjustments.

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Definitions:

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Describes fluctuations in an economy where a period of rapid economic growth is followed by a period of sharp decline.

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The practice, now largely abolished, of jailing individuals who are unable to repay their debts.