When Receivables Are Factored with Recourse and Recorded as a Sale

question 81

Multiple Choice

When receivables are factored with recourse and recorded as a sale, 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 a payable to factor for expected sales adjustments.
• D) Does not record sales adjustments on the factored receivables.

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