A Company Sold $10,000 of Its Accounts Receivable and Was

question 66

Multiple Choice

A Company sold $10,000 of its accounts receivable and was charged a 2% factoring fee.How should the company record this transaction in the journal?

• A)
• \[\begin{array} { |l | r | r | }
• \hline \text { Cash } & 9,800 & \\
• \hline \text { Factoring Fee Expense } & 200 & \\
• \hline \text { Accounts Receivable } & & 10,000 \\
• \hline
• \end{array}\]
• B)
• \(\begin{array}{|l|r|r|}
• \hline \text { Cash } & 10,000 & \\
• \hline \text { Accounts Receivable } & & 10,000 \\
• \hline
• \end{array}\)
• C)
• \(\begin{array}{|l|r|r|}
• \hline \text { Cash } & 10,000 & \\
• \hline \text { Factoring Fee Expense } & & 200 \\
• \hline \text { Accounts Receivable } & & 9,800 \\
• \hline
• \end{array}\)
• D)
• \[\begin{array} { | l | r | r | }
• \hline \text { Accounts Receivable } & 10,000 & \\
• \hline \text { Factoring Fee Expense } & & 200 \\
• \hline \text { Cash } & & 9,800 \\
• \hline
• \end{array}\]
• E)
• \[\begin{array} { | l | r | r | }
• \hline \text { Accounts Receivable } & 9,800 & \\
• \hline \text { Factoring Fee Expense } & 200 & \\
• \hline \text { Cash } & & 10,000 \\
• \hline
• \end{array}\]

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Definitions:

Statute of Frauds

The Statute of Frauds is a legal principle that requires certain types of contracts to be in writing and signed by the party being charged, to be enforceable.

Performance

The act of fulfilling the duties or obligations specified in a contract or agreement.

Oral Modifications

Changes to a contract or agreement made through spoken communication between the parties involved, rather than in written form.

Parol Evidence Rule

A rule in contracts law that prevents parties from presenting extrinsic evidence of terms of the contract that contradict, modify, or vary contractual terms written in the contract document.