When firms sell receivables,the receivables number reported in the ending balance sheet only includes the remaining receivables and will overstate the true growth in receivables over the period.

Question

Quizplus · Accepted Answer

When firms sell receivables, the receivables number reported in the ending balance sheet reflects only the remaining receivables, not overstating true growth but accurately representing the current amount of receivables after the sale.

When Firms Sell Receivables,the Receivables Number Reported in the Ending