The practice of raising funds for a business through the sale of accounts receivable is known as which of the following?

Question

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Factoring accounts receivable involves a business selling its accounts receivable (i.e., invoices) to a third party (the factor) at a discount, in order to raise funds quickly rather than waiting for the invoices to be paid by customers. This practice provides immediate cash flow to the business.

The Practice of Raising Funds for a Business Through the Sale