Receivables Practice Test - CPA Financial Accounting and Reporting (FAR)

On July 1, Year 10, Cabaret Corporation factored $80,000 of its accounts receivable without recourse to Playtime Company. Playtime retains 10% of the accounts receivable as an allowance for sales returns and charges a 5% commission on the gross amount of factored receivables. How much cash did Cabaret receive from factoring its receivables?

Which of the following situations is most likely to be treated as a sale of accounts receivables?

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