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You are watching: Why would a company sell receivables to another company

22) option c) to accelerate accessibility to quantities accumulated 23) alternative a) the obligation of the seller of the receivables to…View the complete answer
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Transcribed photo text: 22. W hy would certainly a firm offer receivables to another company? a. To improve the quality of its credit giving process. To limit its legal licapacity To acceleprice access to amounts collected. b. c. d. To comply through customer agreements. 23. What is "recourse" as it relates to selling receivables? a. The duty of the seller of the receivables to pay the purchaser in instance the debtor stops working to pay b. The responsibility of the purchaser of the receivables to pay the seller in instance the debtor fails to pay The responsibility of the seller of the receivables to pay the purchaser in case the debtor c. returns the product concerned the sale. d The responsibility of the purchaser of the receivables to pay the seller if every one of the receivables are accumulated. of the adhering to is true once accounts receivable are factored without recourse? transactivity may be accounted for either as a secured borrowing or as a sale, 24. Which relying on the substance of the transaction The receivables are supplied as collateral for a promissory note issued to the element by the owner of the receivables. c. The factor assumes the hazard of collectibility and also absorbs any credit losses in collecting the receivables d. The financing price (interemainder expense) must be recognized ratably over the collection period of the receivables. The balance sheet is useful for analyzing every one of the following other than a. liquidity b. solvency c.) profitcapability d. financial adaptability. 25. 26. The net assets of a organization are equal to a. current assets minus existing liabilities. b. complete assets plus full liabilities. c. full assets minus full stockholders' equity d. total assets minus full liabilities 27. The correct order to current current assets is a. cash, accounts receivable, prepaid items, inventories. b. cash, accounts receivable, inventories, prepassist items. c. cash, inventories, accounts receivable, prephelp items. d. cash, inventories, prephelp items, accounts receivable. 28. The basis for classifying assets as present or noncurrent is convariation to cash within a. the bookkeeping cycle or one year, whichever is shorter b. the operating cycle or one year, whichever before is much longer c. the accounting cycle or one year, whichever before is much longer d. the operating cycle or one year, whichever is shorter.