Consider an exporter that sells its accounts receivables to another firm that becomes responsible for obtaining payment from the various importers. This reflects:

Question

​Consider an exporter that sells its accounts receivables to another firm that becomes responsible for obtaining payment from the various importers. This reflects:

Quizplus · Accepted Answer

The scenario described is that of factoring, where the exporter sells their accounts receivables to another firm (the factor) that then takes responsibility for collecting payment from the importers. Accounts receivable financing is a broader term that encompasses various methods of obtaining financing using accounts receivables as collateral. Consignment involves the exporter sending their goods to the importer, who then only pays for what they sell, returning unsold inventory. A letter of credit is a payment mechanism used in international trade where the importer's bank guarantees payment to the exporter.

​Consider an Exporter That Sells Its Accounts Receivables to Another

Consider an Exporter That Sells Its Accounts Receivables to Another