Which of the Following Is a CORRECT Statement Regarding Methods

question 84

Multiple Choice

Which of the following is a CORRECT statement regarding methods to speed up the collection of cash from receivables?

• A)Factoring is used frequently by companies since it is an inexpensive way to raise cash.
• B)Credit card companies will charge a fee of 20-30% of the total amount of the sale.
• C)The company that factors its receivables maintains control over the collection process.
• D)The Credit Card Discount Expense is reported on the income statement.

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Definitions:

Vertically Integrated

A company structure where the company owns its supply chain, from raw materials to the sale of the finished product, to control costs and quality.

Expected Profit

The forecasted amount of profit calculated by multiplying potential outcomes by their probabilities of occurrence.

Expected Profit

The anticipated financial return from an investment or business activity, considering potential risks and earnings.

Optimal Quantity

The most favorable amount of goods or services, determined through analysis, to meet specific objectives like minimizing costs or maximizing profit.