When a business factors its accounts receivables,the business ________.
A) uses the receivables as security for a loan
B) no longer has to deal with the collection of the receivables from the customers
C) receives the total amount of the receivables from the factor
D) receives cash, less an applicable fee, after the factor collects from the customers

Question

Quizplus · Accepted Answer

When a business factors its accounts receivables, it sells the receivables to a third party (the factor) and no longer has to deal with the collection of the receivables from the customers. The factor takes over the collection process.

When a Business Factors Its Accounts Receivables,the Business ________