What is true in the period the company starts the program


Question: If a company adopts an accounts receivable factoring program, and accounts for the factoring as a sale of receivables, which of the following is true in the period the company starts the program (all else equal)? Multiple Choice The factoring arrangement needs to be with a consolidated entity to qualify for sale accounting. Cash flow from operations may increase. The accounts receivable balance will increase. A retroactive restatement is necessary due to a change in accounting principle.

 

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Accounting Basics: What is true in the period the company starts the program
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