Analyze the criteria for the sale of receivables. Propose one

 

  • Analyze the criteria for the sale of receivables.
  • Propose one method that would achieve the maximum amount of money from the sale.

Respond:

 

According to the Wiley CPA review, “Accounts Receivable (AR) is the proceeds or payment that a business or a company gets back from their customers” A debtor who is person or enterprise that owes money to the business is a customer, who have purchased goods & services on credit. Usually the credit period is short ranging from few days to months or in some cases maybe a year.

Four different types  of receivables are:

Accounts Receivable, notes receivable, trade receivables and non-trade receivables.  The most liquid is notes receivable.  Receivables are valued on the balance sheet at net realizable value.

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