Question

Speedy Serv was unable to collect some of its accounts receivable from customers. Speedy decided to...

Speedy Serv was unable to collect some of its accounts receivable from customers. Speedy decided to sell its receivables to Surety, a collection agency. Surety specializes in buying accounts receivable from other companies and trying to collect from the "dead-beat" customers. Speedy Serv signed over $8,000 in accounts receivable to Surety, and received $5,000 from Surety as payment for the receivables. Surety is called a: Group of answer choices Factor Pledger Payee Ninja.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer : Option A - Factor.

Explanation:

Factoring implies a financial arrangement between the factor and client, in which the firm (client) gets advances in return for receivables, from a financial institution (factor). It is a financing technique, in which there is an outright selling of receivables by a firm to a third party, i.e. factor, at discounted prices.

Here, Firm is Speedy Serv and Factor is Surety. Accounts Receivales signed over by firm is $8,000 at a discounted price of $5,000.

Note : Please comment down for any further clarifications.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Accounts Receivable Analysis Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both...
Accounts Receivable Analysis Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (in millions): Xavier Lestrade Sales $240,900 $335,800 Credit card receivables-beginning 41,653 66,638 Credit card receivables-ending 34,775 51,306 a. Determine the (1) accounts receivable turnover and (2) the number of days' sales in receivables for both companies. Round...
Accounts Receivable Analysis Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both...
Accounts Receivable Analysis Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (in millions): Xavier Lestrade Sales $8,500,000 $4,585,000 Credit card receivables—beginning 820,000 600,000 Credit card receviables—ending 880,000 710,000 a. Determine the (1) accounts receivable turnover and (2) the number of days' sales in receivables for both companies. Round...
Accounts Receivable Analysis Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both...
Accounts Receivable Analysis Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years is as follows (in millions): Xavier Lestrade Sales $8,500,000 $4,585,000 Credit card receivables—beginning 820,000 600,000 Credit card receviables—ending 880,000 710,000 a. Determine the (1) accounts receivable turnover and (2) the number of days' sales in receivables for both companies. Round...
Lonergan Company occasionally uses its accounts receivable to obtain immediate cash. At the end of June...
Lonergan Company occasionally uses its accounts receivable to obtain immediate cash. At the end of June 2021, the company had accounts receivable of $900,000. Lonergan needs approximately $560,000 to capitalize on a unique investment opportunity. On July 1, 2021, a local bank offers Lonergan the following two alternatives: Borrow $560,000, sign a note payable, and assign the entire receivable balance as collateral. At the end of each month, a remittance will be made to the bank that equals the amount...
During the current accounting period, revenue from credit sales is $791,000. The accounts receivable balance is...
During the current accounting period, revenue from credit sales is $791,000. The accounts receivable balance is $52,680 at the beginning of the period and $64,200 at the end of the period. Which of the following statements is correct? The receivables turnover ratio is 27.1. On average, it takes 13.5 days to collect payment from credit customers. The receivables turnover ratio is 13.5. On average, the company sells its inventory every 27.07 days.
Colorado Rocky Cookie Company offers credit terms to its customers. At the end of 2021, accounts...
Colorado Rocky Cookie Company offers credit terms to its customers. At the end of 2021, accounts receivable totaled $690,000. The allowance method is used to account for uncollectible accounts. The allowance for uncollectible accounts had a credit balance of $45,000 at the beginning of 2021 and $27,500 in receivables were written off during the year as uncollectible. Also, $2,500 in cash was received in December from a customer whose account previously had been written off. The company estimates bad debts...
Colorado Rocky Cookie Company offers credit terms to its customers. At the end of 2021, accounts...
Colorado Rocky Cookie Company offers credit terms to its customers. At the end of 2021, accounts receivable totaled $720,000. The allowance method is used to account for uncollectible accounts. the allowance for uncollectible accounts had a credit balance of $51,000 at the beginning of 2021 and $30,500 in receivables were written off during the year as uncollectible. also, $3,100 in cash was received in December from a customer whose account previously had been written off. the company estimates bad debts...
Artic Inc. is having a hard time collecting its outstanding Accounts Receivables from its customers. Artic...
Artic Inc. is having a hard time collecting its outstanding Accounts Receivables from its customers. Artic Inc. decides to factor $700,000 of its Accounts Receivables to Collection Co. on 1/1/20. Collection Co. assesses a finance charge of 5.85% of the factored Accounts Receivables, and retains an amount equal to 4.25% of the factored Accounts Receivables for probable adjustments. **You may round your answers to the nearest dollar. (A) If the factoring between Artic Inc. and Collection Co. is done without...
The average of number days taken to collect debts from credit customers indicates the efficiency of...
The average of number days taken to collect debts from credit customers indicates the efficiency of collection. The shorter the number of days, the greater the efficiency. The average collection period is obtained by dividing the average accounts receivable by the daily average credit sales. For Smith & Co. the average collection period is 28 days and average accounts receivable is $196000. The company’s daily average credit is: 2. When the cost of goods sold is divided by the average...
Slide 30-13 Lonergan Company occasionally uses its accounts receivable to obtain immediate cash. At the end...
Slide 30-13 Lonergan Company occasionally uses its accounts receivable to obtain immediate cash. At the end of June 2018, the company had accounts receivable of $1,060,000. Lonergan needs approximately $640,000 to capitalize on a unique investment opportunity. On July 1, 2018, a local bank offers Lonegan the following two alternatives: Borrow $640,000, sign a note payable, and assign the entire receivable balance as collateral. At the end of each month, a remittance will be made to the bank that equals...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT