Priscilla's Exotic Pets discounted a note receivable without recourse and the sales criteria were met. The discounting is recorded as:

Question

Quizplus · Accepted Answer

When a note receivable is discounted without recourse and the sales criteria are met, it is recorded as a sale. This means that Priscilla's Exotic Pets has transferred the ownership of the note to the discounting party and no longer has any rights or responsibilities associated with it. The proceeds received from the discounting are recorded as cash received from the sale. Therefore, option C is the correct answer. Options A and B are incorrect because they do not reflect the nature of the transaction. Option D is also incorrect because there is a clear accounting treatment for this type of transaction.

Priscilla's Exotic Pets Discounted a Note Receivable Without Recourse and the Sales