What occurs when a business factors its receivables?

Q: How does accounting provide useful information about economic activities?

A: Whenever a company wants to make decisions that include money that decision comes under the economic…

Q: What is accounting and how does it relate to business?

A: Accounting: In finance, accounting is the process of documenting financial transactions, keeping and…

Q: what makes credit important to the business?

A: Credit can be the amount of money a business can borrow or can be termed as the ability of that…

Q: What is the impact of the credit and collection functions on the other parts of a business (or on…

A: Credit refers to the debt and loan that is provided by the company to others at a certain rate of…

Q: What is accrual accounting and how does it work?

A: Accrual accounting is a system of accounting wherein: Revenues are recognized as and when they are…

Q: Why is an analysis of the company’s cash balance important?

A: Cash: Cash is the money which is readily available in the form of currency. Since cash can be easily…

Q: The revenue cycle of a company generally includes which accounts?a. Inventory, accounts payable, and…

A: Revenue Cycle: Revenue cycle records all the transactions that originate from selling a product and…

Q: What does the accrual-accounting model measures?

A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…

Q: What is the difference between cash basis accounting and accrual basis accounting?

A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…

Q: What account impacts the equity of a business?

A: The Equity of the business is effected by following accounts, with the transactions mentioned as…

Q: What is the difference between the cash basis and the accrual basis of accounting?

A: The accounting is a process to identify the business transactions, record the transactions and…

Q: How can you tell by looking at the Statement of Cash Flows of a company that the company collected…

A: In a cash flow statement, cash flows from operating activities are those activities which are done…

Q: Why is the accrual basis of accounting generally preferred over the cash basis?

A: Accrual accounting aims to record the impacts of accounting events in the period when such events…

Q: What is the meaning of the term revenue? Does the receiptof cash by a business indicate that revenue…

A: Realization principle: It can be defined as a concept that is based on the rule that the revenue…

Q: How does net income affect the operation of the business?

A: The bottom line of income statement is net income. It’s the outcome of sales and gains minus the…

Q: What does an Income statement tell about a business?

A: An entity requires details about its operations such as profits, financial position and cash flows…

Q: What are the two primary functions of financial accounting?

A: Financial accounting is that field of accounting in which all financial transactions are recorded in…

Q: How does IFRS APPLY TO THE ACCOUNTING CYCLE AND FINANCIAL REPORTING?

A: IFRS - International Financial Reporting Cycle is the standard set by the IASB (International…

Q: What do you know about the interrelationships between income statements, balance sheets, and cash…

A: This question deals with the interrelationships between income statements, balance sheets, and cash…

Q: What is accrual vs cash basis accounting. Explain with examples?

A: Under accrual basis of accounting, transactions are recorded & recognized as and when they…

Q: Explain the relationship of Social and Economic Accounting to Financial What are the features of the…

A: Answer: Social and economic accounting and financial are all related with each other. The basic…

Q: How would you describe the difference between cash basis accounting and accrual basis accounting?…

A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…

Q: What is accural vs cash basis accounting. Explain with examples?

A: Cash Accounting: A form of accounting in which receipts are reported during the period in which they…

Q: Why must a balance sheet always balance? What are the major assets and claims on a commercial bank’s…

A: Balance sheet is called as statement of assets and liabilities. Liabilities represent claims of the…

Q: Why is it advantageous for a company to finance its receivables?

A: Accounts receivable is the amount due to a firm for the use of goods and services but not yet paid…

Q: What factors affect accounts payable turnover ratio?

A: Accounts Payable ratio is calculated by dividing total supplier purchases by the average accounts…

Q: Why Are Financial Accounting and Bookkeeping So Different?

A: The bookkeeping is recording the transactions and accounting is process to classify, record the…

Q: Explain how factoring works. Of what benefit is factoring to a firm that sells its receivables?

A: Lets first understand the meaning of factoring. Factoring is a selling the debtor to the factor at…

Q: is the profit that a business makes a reliable indicator of its cash balance?

A: The profit is not a reliable indicator of the cash balance. This is because there are a number of…

Q: Why aren’t transactions involving accounts payable considered to be financing activities?

A: Answer: Accounts payable is current liability which is used in computing working capital, excess of…

Q: How much were the companies liabilities?

A: The Basic  Accounting Equation  Total Assets = Owner's  Equity + Liabilities

Q: Difference Between Financial Accounting And Bookkeeping?

A: Definition:   Bookkeeping: Bookkeeping is the process of recording financial transactions and other…

Q: .Which of the following transactions affects the total value of liabilities of a firm? Goods…

A: Solution: Transaction that affect total value of liabilities of a firm, is the transaction that…

Q: How does company’s investment in receivables is influenced by several variables? What are the…

A: Receivables: Receivables refer to an amount to be received in future. General classifications of…

Q: How does the type of business structure affect accounting, reporting, taxes, and liability?

A: Types of business are sole proprietorship, Partnership, LLC, Cooperative, Corporations.

Q: In financial accounts, how are interfund transactions accounted for

A: An accounting firm's financial statements serve as concise summaries of its activities, conveyed…

Q: what is the purchase and pooling method of accounting for business combinations?

A: The Pooling of Interest method is followed in case of an amalgamation in the nature of the merger.…

Q: What makes up the Financial Structure of a business?

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: What are the key variables that influence a company’s investment in receivables?

A: The variables that influence the company investment in receivables are as follows, The level of…