The process of a company selling its accounts receivable to another company is referred as:
A)discounting.
B)adjusting.
C)assignment.
D)factoring.

Question

Quizplus · Accepted Answer

The correct term for a company selling its accounts receivable is factoring. Factoring is a financial transaction where a company sells its accounts receivable to a third party, referred to as a factor, at a discount in exchange for immediate cash. This allows the original company to improve its cash flow and avoid the risks and costs associated with collecting their own receivables.

The Process of a Company Selling Its Accounts Receivable to Another