1. A company makes a sale to a customer on credit and borrows cash (70-90% of the amount of sales) from a bank using receivables as security. When the company receives the customer payment, it sends this money to the lender. This transaction is an example of what? Factoring with recourse Securitization Collateralized borrowing Nonrecourse factoring
1.
A company makes a sale to a customer on credit and borrows cash (70-90% of the amount of sales) from a bank using receivables as security. When the company receives the customer payment, it sends this money to the lender. This transaction is an example of what?
Factoring with recourse
Securitization
Collateralized borrowing
Nonrecourse factoring
2.
Which of the following statements about the direct and indirect methods for presenting Cash Flow Statement is NOT true?
According to the indirect method,
The direct method is based on use of actual
Using direct and indirect methods leads to different amounts shown as cash flow from operations, investing, and financing activities.
The cash flow statement, income statement and balance sheet are interconnected: the cash flow amount is equal to the corresponding income statement amount plus or minus the change in the related balance sheet account.
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