Maurio Inc., a publishing house, wants to invest in digital publishing. However, the company does not possess enough capital to kick start the project. In order to gain immediate funds, Maurio Inc. sells its accounts of credits to Restube, a financing firm, at a discount. Which of the following short-term financing options is being used by Maurio Inc. in the given scenario?
A) Factoring
B) Trade credit
C) Commercial paper
D) Short-term bank loans

Question

Quizplus · Accepted Answer

Factoring is the process of selling accounts receivable to a third party at a discount to obtain immediate cash.