When Accounts Receivable Are Factored with Recourse and Are Accounted

question 25

Multiple Choice

When accounts receivable are factored with recourse and are accounted for as a loan, what account does the transferor credit?

• A) Accounts receivable
• B) Sales
• C) Liability
• D) Accounts receivable assigned

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Definitions:

Market Output

The aggregate amount of products and services created and available for purchase within a market.

Merging of Firms

The process where two or more separate entities come together to form a single, combined organization, typically to achieve economic efficiencies or market advantages.

Identical Product

A product that is exactly the same in every detail and attribute as another, making them indistinguishable from each other.

High Barriers

Obstacles that make it difficult for new competitors to enter a market, including high start-up costs, complex regulations, or strong brand loyalty.