What is "recourse" as it relates to selling receivables?

Question

Quizplus · Accepted Answer

Recourse refers to the seller of the receivables agreeing to pay back the purchaser if the debtor fails to pay. This means that the purchaser has some recourse if the receivables turn out to be uncollectible. Option B is not correct as the purchaser is the one buying the receivables, not selling them. Option C is not correct as it refers to a return of a product, which is not relevant to selling receivables. Option D is not correct as the purchaser would be obligated to pay the seller regardless of whether all the receivables are collected or not.

What Is "Recourse" as It Relates to Selling Receivables