A Company Factored $45,000 of Its Accounts Receivable and Was

question 116

Multiple Choice

A company factored $45,000 of its accounts receivable and was charged a 4% factoring fee.The journal entry to record this transaction would include a:

• A)Debit to Cash of $45,000,a debit to Factoring Fee Expense of $1,800,and a credit to Accounts Receivable of $46,800.
• B)Debit to Cash of $45,000 and a credit to Accounts Receivable of $45,000.
• C)Debit to Cash of $43,200,a debit to Factoring Fee Expense of $1,800,and a credit to Accounts Receivable of $45,000.
• D)Debit to Cash of $46,800 and a credit to Accounts Receivable of $46,800.
• E)Debit to Cash of $45,000 and a credit to Notes Payable of $45,000.

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Definitions:

Enols

Organic compounds characterized by a carbon-carbon double bond directly adjacent to a hydroxyl group, serving as intermediates in various reactions.

Organic Product

A compound or substance that has been derived from a living organism and contains carbon atoms.

Iminium Salt

A compound derived from the addition of an amine to a carbonyl compound, forming a positively charged nitrogen atom.

Alkyl Halide

A compound containing a halogen atom covalently bonded to an alkyl group; also known as a haloalkane.