Sir i have a doubt in bad debts. Imagine currently the sales of a Company are 1m and bad debts are 3% of turnover. A company is planning to employ a factor and so this would reduce the bad debts to 1% and it is a "With recourse agreement".
Sir what would be the impact on bad debts?
Like bad debts saving will be 1m * (3% - 1%) and the extra bad debts cost of 1% will be a cost to the company right?
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Management of Receivables
7y ago#1Correct :-)
Sir another doubt. There's a question where they haven't mentioned whether the agreement is a recourse or non recourse agreement. But there is bad debts and so it has been treated as savings to the company. My doubt is:
Should bad debts be treated as savings to the company if there's no mention about recourse or non recourse agreement?
7y ago#3Yes they should :-)
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