A Note Receivable That Is Sold (I

question 49

Multiple Choice

A note receivable that is sold (i.e. discounted) to obtain early cash must be:

• A) Retained in the accounts in the same manner as before discounting.
• B) Reported as an unusual loss if it is dishonored.
• C) Disclosed as a contingent liability if it is discounted without recourse.
• D) Reported as a sale or a loan.

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Definitions:

Disclaimer of Liability

A statement intended to specify or delimit the scope of rights and obligations that may be exercised and enforced by parties in a legally recognized relationship.

Damage to Car

Physical harm or impairment to a vehicle, affecting its value or functionality.

Environmental Forces

External factors that affect an organization's performance, including economic, social, technological, and regulatory conditions.

Marketing Environment

Constitutes the external forces, including political, economic, social, and technological factors, that affect a company's marketing strategies and operations.