When customers of Trankent Corp., an equipment manufacturing unit, buy equipment on credit and then delay making payments, they receive a bill from a collection agency. Which of the following sources for short-term financing is being used by Trankent Corp. in this scenario?
A) Trade credit
B) Revolving credit agreement
C) Factoring
D) Short-term bank loans

Question

Quizplus · Accepted Answer

Trankent Corp. is using factoring, which involves selling accounts receivable to a collection agency or a factoring company to obtain immediate cash, thus transferring the responsibility of collecting the debt to the agency.

When Customers of Trankent Corp