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

question 46

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 $45,000 and a credit to Notes Payable of $45,000.
• E) Debit to Cash of $46,800 and a credit to Accounts Receivable of $46,800.

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Definitions:

Emotion-Focused Coping

The coping strategy that involves responding to the stress that one is feeling—trying to manage one’s emotional reaction—rather than focusing on the root problem itself.

Emotion-Focused Coping

Strategies aimed at managing and diminishing the emotional distress associated with stressful situations.

Problem-Focused Coping

A strategy aimed at addressing the root cause of stress by directly tackling the problem that is causing the stress, as opposed to merely managing the symptoms of stress.

Hardiness

A personality trait characterized by a sense of commitment rather than alienation and of control rather than powerlessness; a perception of problems as challenges rather than threats.