A Company Factored $45,000 of Its Accounts Receivable and Was

question 3

Multiple Choice

A company factored $45,000 of its accounts receivable and was charged a 4% factoring fee. The journal entry to record this transaction would include a:

• A)Debit to Cash of $45,000, a debit to Factoring Fee Expense of $1,800, and credit to Accounts Receivable of $46,800.
• B)Debit to Cash of $45,000 and a credit to Accounts Receivable of $45,000.
• C)Debit to Cash of $43,200, a debit to Factoring Fee Expense of $1,800, and a credit to Accounts Receivable of $45,000.
• D)Debit to Cash of $46,800 and a credit to Accounts Receivable of $46,800.
• E)Debit to Cash of $45,000 and a credit to Notes Payable of $45,000.

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Definitions:

Nation's Exports

The goods and services produced in one country and sold to buyers in another country.

Imports

Goods or services brought into one country from another for sale or exchange.

Exchange Rate

The value of one currency for the purpose of conversion to another, impacting trade and economics globally.

Transactions

The action of conducting business or trading between parties, typically involving the exchange of goods, services, money, or information.