Peggy Is in the Business of Factoring Accounts Receivable

question 43

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 $18,000.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 $7,000 for the current year.
• C)$7,000 for the current year.
• D)$12,000 for the current year.
• E)None of the above.

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Definitions:

Trustworthy

Deserving of trust or confidence, reliable and honest.

Christian Singles

Individuals who identify with the Christian faith and are unmarried, often referring to a specific community or group.

Credibility

The quality of being trusted and believed in, often based on a reputation for honesty or reliability.

Threat

An influence technique that is a communication taking the general form, “If you don’t do X (which I want), then I will do Y (which you don’t want).” See also Promise.