Which of the following is true when accounts receivable are factored without recourse? O a. The risks and rewards of these receivables still remain with the seller. O b. The factor assumes the risk of collectibility and absorbs any credit losses in collecting the receivables. O c. The transaction may be accounted for either as a secured borrowing or as a sale, depending upon the substance of the transaction. • d. The receivables are used as collateral for a promissory note issued to the factor by the owner of the receivables.
Added by Muhammad Faris S.
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Step 1: When accounts receivable are factored without recourse, it means that the factor assumes the risk of collectability and absorbs any credit losses in collecting the receivables. Show more…
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