High Point Hotel (HPH)has $165,000 in Accounts Receivable

question 23

Multiple Choice

High Point Hotel (HPH) has $165,000 in accounts receivable.To finance a major purchase,the company assigns these receivables to Cross Town Bank.Which one of the following statements correctly describes this transaction?

• A)HPH will immediately receive $165,000 and will have no further obligation related to these receivables.
• B)HPH will receive some amount of cash immediately while maintaining full responsibility for any uncollected receivables.
• C)Cross Town Bank accepts full responsibility for the collection of the accounts receivables and, in exchange, immediately pays HPH a discounted value for its receivables.
• D)Cross Town Bank accepts full responsibility for collecting the accounts receivables and pays HPH a discounted price for the accounts collected after the normal collection period has elapsed.
• E)HPH receives the full amount of its receivables upon assignment but must reimburse Cross Town Bank for any uncollected account.

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Definitions:

Mathematical Interpretation

The process of understanding and applying mathematical concepts and symbols to solve problems or represent real-world scenarios.

Digested Food

Nutrients that have been broken down by enzymatic action into forms that can be absorbed by the body.

Stomach Absorbs

The process by which the stomach's lining absorbs specific substances such as alcohol and some drugs, though most nutrient absorption occurs in the intestines.

Alimentary Canal

The entire digestive tract from the mouth to the anus, through which food is ingested, broken down, and absorbed.