Peggy Is in the Business of Factoring Accounts Receivable

question 82

Multiple Choice

Peggy is in the business of factoring accounts receivable. Last year, she purchased a $30,000 account receivable for $25,000. This year, the account was settled for $25,000. How much loss can Peggy deduct and in which year?

• A) $5,000 for the current year.
• B) $5,000 for the prior year and $5,000 for the current year.
• C) $5,000 for the prior year.
• D) $10,000 for the current year.
• E) None of the above.

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Definitions:

Core Work

The primary activities or tasks that are central to the main business or function of an organization.

Transactional

Relating to exchanges or interactions between parties, often with a focus on business transactions.

Consultants

Professional experts who are hired to provide advice and expertise in a specific field to solve problems or enhance the performance of an organization.

Absence Management

A strategic approach that organizations use to reduce the impact and occurrence of employee absenteeism, ensuring productivity is maintained.