CIMA Financial Reporting F1 Question # 66 Topic 7 Discussion

CIMA Financial Reporting F1 Question # 66 Topic 7 Discussion

F1 Exam Topic 7 Question 66 Discussion:
Question #: 66
Topic #: 7

UV has recently been having cash flow issues due to its credit customers paying after the credit period they have been granted.

UV is looking into factoring the receivables to a factoring company on a recourse basis to improve its cash flow.

Which TWO of the following will UV encounter as a result of employing the factoring company?


A.

No irrecoverable debts


B.

Reduction in payables days


C.

Reduction in the need for management control


D.

Reduction in bank overdraft charges


E.

Increase in cash sales


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