Loose Leaf for Financial Accounting: Information for Decisions
Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter 7, Problem 15E
Summary Introduction

Introduction:

Selling receivables: There is an option that is available in case of accounts receivable which is that the company can sell its accounts receivable to any third party who will collect the payments from debtors, and in return, this third party will charge a fee. This option is called debt factoring.

Pledging receivables: It can be a point of conflict between the fundraising team and the accounting department. From pledged receivable, accounting rules allow a business to recognize revenue. If it is unconditional then on the date of commitment it is also known as a promise to give the amount.

To prepare: Journal Entries.

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