Aaron,a businessman,has a method of keeping track of accounts receivable by sorting them into groups of those that are 30,60,90,and over 90 days past due.Which of the following actions will the collection agency which buys the delinquent account from Aaron do?
A) Collect the entire amount owed and return it to Aaron.
B) Sell it back to Aaron after collecting the entire amount owed.
C) Collect the entire amount owed and keep all the money it obtains.
D) Take mild actions and collect a token amount.

Question

Quizplus · Accepted Answer

The collection agency buys delinquent accounts from businesses at a discounted rate and then attempts to collect the full amount owed from the debtor. In this case, the agency would collect the entire amount owed and keep the money it obtains as its profit. Therefore, option C is the best choice. The agency is unlikely to sell back the account to Aaron or take mild actions to collect a token amount.

Aaron,a Businessman,has a Method of Keeping Track of Accounts Receivable