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:

Service Quality

An assessment of how well a delivered service matches the expectations of customers, often considered a crucial determinant of customer satisfaction and loyalty.

Customer's Interests

Preferences, needs, or desires that customers seek to fulfill when purchasing goods or services.

Ethical Decisions

Choices made based on moral principles and values, often involving considerations of fairness, accountability, and integrity.

Job Enlargement

The grouping of a variety of tasks about the same skill level; horizontal enlargement.