If a retailer regularly sells its receivables to a factor the service charge of the factor should be classified as a(n)

A) selling expense.
B) interest expense.
C) other expense.
D) contra asset.

Question

If a retailer regularly sells its receivables to a factor the service charge of the factor should be classified as a(n)A)  selling expense.B)  interest expense.C)  other expense.D)  contra asset.

Shanyah Rumph · Accepted Answer

Final Answer : A, Explanation :  Selling expenses include all direct and indirect costs associated with the selling process, including the service charge of a factor when a retailer sells its receivables. This is because factoring is often used as a means to accelerate cash flow and manage receivables, which are directly related to the sales process.

If a retailer regularly sells its receivables to a factor the service charge of the factor should be classified as a(n)

A) selling expense.
B) interest expense.
C) other expense.
D) contra asset.

Definitions

Learning Objectives

Learning Objectives

Related questions

If a retailer regularly sells its receivables to a factor the service charge of the factor should be classified as a(n) A) selling expense.B) interest expense.C) other expense.D) contra asset.

Definitions

Learning Objectives

Learning Objectives

Related questions

If a retailer regularly sells its receivables to a factor the service charge of the factor should be classified as a(n)

A) selling expense.
B) interest expense.
C) other expense.
D) contra asset.