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A company factors $400,000 of accounts receivable on a without recourse basis. The factor assesses a finance charge of 4% of the receivables. The company
A company factors $400,000 of accounts receivable on a without recourse basis. The factor assesses a finance charge of 4% of the receivables. The company debits cash for $376,000 when recording this transaction. What percentage of the receivables did the factor retain to cover possible future sales discounts, returns, and allowances? a. 0% b. 2% c. 4% d. 6%
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