The common forms of receivable financing are ___, ___, ___, and ___.

(a)  

If the loan is ___, in the banking parlance means that the interest for the term of the loan is ___.

(a)  

Assignment of accounts receivable means that a borrower called the ___ transfers rights in some accounts receivable to a lender called the ___ in consideration of the loan.

(a)  

Assignment is a (a)   of pledging of accounts receivable.

Assignment is secured borrowing evidenced by a ___ and a ___ both of which the assignor assigns.

(a)  

Pledging is ___ because all ___ serve as collateral security for the loan.

(a)  

Assignment may be done either on a ___ or ___ basis.

(a)  

When accounts are assigned on a (a)   basis, customers are not informed that their accounts have been assigned.

In (a)   basis, the customers continue to make payments to the assignor, who in turn remits the collections to the assignee.

When accounts are assigned on a (a)   basis, customers are notified to make their payments directly to the assignee.

The assignee usually charges interest for the loan that it makes and requires a ___ or ___ or commission for the assignment agreement.

(a)  

The (a)   is equal to the balance of assigned accounts receivable minus the balance of the related note payable to bank.

The net realizable value is included in the caption “ (a)   .”

Factoring is a sale on accounts receivable usually on a ___, ___.

(a)  

In a factoring arrangement, an entity sells accounts receivable to a bank or finance entity called a (a)   .

In factoring, a (a)   is recognized for the difference between the proceeds received and the net carrying amount of the receivables factored.

Factoring differs from an assignment in that an entity actually (a)   of the accounts receivable to the factor. Thus, the factor assumes responsibility for uncollectible factored accounts.

In assignment, the assignor (a)   ownership of the accounts assigned.

Factoring may take the form of the following:

1. ___

2. ___

(a)  

If an entity finds itself in a critical cash position, it may be forced to factor some or all of its accounts receivable at a substantial discount to a bank or a finance entity to obtain the much needed cash.

(a)  

Factoring may involve a (a)   where a finance entity purchases all of the accounts receivable of a certain entity.

In factoring as continuing agreement, the factor may withhold a predetermined amount as a protection against customer returns and allowances and other special adjustments. This amount withheld is known as the ” (a)   .”

The factor’s holdback is a ___ and classified as ___.

(a)  

If the interest is computed on a (a)   , the denominator is 365 days.

In the absence of any contrary statement, the simple interest is computed using (a)   days as denominator.

The recourse obligation is initially recorded as (a)   .

A ___ is a plastic card which enables the holder to obtain credit up to a ___ from the issuer of the card for the purchase of goods and services.

(a)  

Among the 2 types of assignment, the (a)   basis is the most common.

As a from of receivable financing, discounting specifically pertains to (a)   .

In a promissory note, the original parties are the ___ and ___.

(a)  

When a note is negotiable, the payee may obtain cash before maturity date by (a)   the note at a bank or other financing company.

To discount the note, the payee must ___ it. Thus, legally the payee becomes an ___ and the bank becomes an ___.

(a)  

(a)   is the transfer of right to a negotiable instrument by simply signing at the back of the instrument.

Endorsement may be (a)   which means that the endorser shall pay the endorsee if the maker dishonors the note.

In the legal parlance, the endorsement with recourse is the (a)   of the endorser.

In the accounting parlance, the endorsement with recourse is the (a)   of the endorser.

Endorsement may be (a)   which means that the endorser avoids future liability even if the maker refuses to pay the endorsee on the date of maturity.

(a)   refer to the discounted value of the note received by the endorser from the endorsee.

(a)   = Maturity value – Discount

(a)   is the amount due on the note at the date of maturity.

Principal + Interest = (a)  

(a)   is the date on which the note should be paid.

(a)   is the amount appearing on the face of the note. It is also referred to as face value.

(a)   is the amount of interest for the full term of the note.

Interest is compounded as (a)   .

(a)   is the rate appearing on the face of the note.

(a)   is the period within which interest shall accrue. For discounting purposes, it is the period from date of note to maturity date.

The term “time” is the entire period or “ (a)   ” of the note.

(a)   is the amount of interest deducted by the bank in advance.

Discount is equal to (a)   .

(a)   is the rate used by the bank in computing the discount.

(a)   is the period of time from date of discounting to maturity date.

(a)   equals term of the note minus the expired portion up to the date of discounting.

The discount period is the (a)   of the note.

The interest must be for the (a)   of the note in determining the maturity value.

The difference between the net proceeds from discounting and the carrying amount of the note receivable is recognized as (a)   .

If the discounting is ___, the sale of the note receivable is ___ and therefore there is no contingent liability.

(a)  

If the discounting is without recourse, the note receivable account is (a)   because the sale of the note receivable is without recourse or absolute.

The interest income is credited for the actual (a)   on the date of discounting.

If the discounting is with recourse, the transaction is accounted for as either of the following:

a. ___

b. ___

(a)  

If the discounting is treated as a conditional sale of note receivable, a (a)   is recognized.

The (a)   account is deducted from the total notes receivable when preparing the statement of financial position with disclosure of the contingent liability.

If the discounting is treated as a secured borrowing. The note receivable is (a)   but instead an accounting liability is recorded at an amount equal to the face amount of the note receivable discounted.

(a)   provides that an entity shall derecognize a financial asset when either one of the following criteria is met:

a.    The contractual rights to the cash flows of the financial asset has expired.

b.    The financial asset has been transferred and the transfer qualifies for derecognition based on the extent of transfer of risks and rewards of ownership.

The first criterion is usually easy to apply.

The application of the second criterion is often complex.

(a)   , provides the following guidelines for derecognition based on transfer of risks and rewards.

1.    If the entity has transferred substantially all risks and rewards, the financial asset shall be derecognized.

2.    If the entity has retained substantially all risks and rewards, the financial asset shall not be derecognized.

3.    If the entity has neither transferred nor retained substantially all risks and rewards, derecognition depends on whether the entity has retained control of the asset.

a.    If the entity has lost control of the asset, the financial asset is derecognized in its entirety.

b.    If the entirety has retained control over the asset, the financial asset is not derecognized.

The discounting transaction is a combination of the guidelines in the second criterion.

a.    The entity has substantially ___ all “rewards.”

b.    The entity has ___ substantially all “risks.”

c.     The entity has ___ over the note receivable.

(a)  

Financial instrument that contains a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.

(a)  

Enumerate the two specific conditional sale accounts:

(a)  

Enumerate the two specific secured borrowing accounts:

(a)