1. Why is selling the receivables, or "factoring " popular with companies such as Macy's and J.C. Penney? What are the advantages of factoring?
2. Discuss uncollectible accounts. What factors lead to accounts being uncollectible? What options do businesses have when accounts become uncollectible?
3. What does it mean to write off an uncollectible account? Why would companies do this? What effect does delinquency have on a company's credit rating?
4. Why is it important for businesses to forecast (predict) their bad debts for an upcoming cycle?