Brustle's Pottery either factors or assigns all of its receivables to other firms. This is known as:
A) accounts receivable financing.
B) pledged financing.
C) capital funding.
D) daily funding.
E) capital financing.

Question

Quizplus · Accepted Answer

Accounts receivable financing (also known as factoring) refers to when a company sells its outstanding invoices to a third-party financial company for immediate cash. This is what Brustle's Pottery is doing by either factoring or assigning all of its receivables to other firms. Option B, pledged financing, refers to using assets (such as accounts receivable) as collateral for a loan. Options C, D, and E are not relevant to the scenario described.

Brustle's Pottery Either Factors or Assigns All of Its Receivables