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Knowledge Check 01 When accounts receivable are factored with recourse, it means Multiple Choice O...

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Accounting

Knowledge Check 01 When accounts receivable are factored with recourse, it means Multiple Choice O O The seller retains all of the risk of bad debts. The risk of bad debts is transferred to the buyer. To compensate the seller for retaining the risk of bad debts, the buyer usually charges a higher factoring fee (as compared to the fee charged when receivables are sold without recourse). The buyer guarantees that the seller will be paid even if some receivables prove to be uncollectible.

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