In considering factoring accounts receivable, which of the following statements is (are) correct?
I. Maturity factoring occurs when the firm receives payment at the normal collection or due date of the factored accounts.
II. Advance factoring occurs when the firm receives payment in prior to the normal collection or due date of the factored accounts.
A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements I and II are correct.
D) Neither statement I nor II is correct.

Question

In considering factoring accounts receivable, which of the following statements is (are) correct? 
I. Maturity factoring occurs when the firm receives payment at the normal collection or due date of the factored accounts.
II. Advance factoring occurs when the firm receives payment in prior to the normal collection or due date of the factored accounts.
A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements I and II are correct.
D) Neither statement I nor II is correct.

Quizplus · Accepted Answer

Both statement I and II are correct. Maturity factoring is when the factoring company receives payment at the normal collection or due date of the factored accounts. Advance factoring is when the factoring company provides the firm with an advance payment prior to the normal receipt date of the factored accounts.

In Considering Factoring Accounts Receivable, Which of the Following Statements