When Accounts Receivable Are Assigned, the Risk of Ownership

question 24

Multiple Choice

When accounts receivable are assigned, the risk of ownership

• A)and title pass to the finance company
• B)and the title are retained by the borrowing company
• C)passes to the finance company, but the title is retained by the borrowing company
• D)is retained by the borrowing company, but the title is passed to the finance company

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Definitions:

Absorption Costing

A costing approach that incorporates all costs related to manufacturing, including both fixed and variable costs, into the price of a product.

Unit Product Cost

The total expense incurred to produce, manufacture, or acquire a single unit of a product, including direct labor, materials, and overhead costs.

Year 1

The first year in a given time period, often used as a baseline for analysis in financial contexts or project planning.

Variable Costing

An accounting method that considers only variable production costs (materials, labor, and overhead) in the cost of goods sold and excludes fixed costs.