Wk 6 Essay

Wk 6 Essay - Tara Anderson 2/18/09 Accounts Receivable as a...

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Tara Anderson 2/18/09 Accounts Receivable as a Source of Cash (7-70) Fullmer Products Inc has a couple of different options they can choose from on handling this situation. First they could choose the accounts receivable factoring which would involve the bank taking over all their activities which would include: accounts receivable accounts, cost of goods sold (sale), billing Fullmer customers, and collecting from the customers. One of the things Fullmer Products will need to watch for is that using this method the fee for the bank to use this method is usually higher than the interest that they would have on the loan. Another method could be selling receivables with recourse, in this one the bank would advance the money to Fullmer Products and in return for receivables and gives them the right to collect receivables if Fullmer Products failed to make a payment. Last there is secured borrowing which has no accounting problems involved. The loan is proof by a written agreement that either a general assignment of
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This note was uploaded on 05/29/2011 for the course EC 2011 taught by Professor Johnson during the Spring '11 term at FIT.

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Wk 6 Essay - Tara Anderson 2/18/09 Accounts Receivable as a...

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