______ involves a business selling its accounts receivable to either a bank or a finance company.

Question

Quizplus · Accepted Answer

Factoring is the process in which a business sells its accounts receivable to a third-party company, such as a bank or finance company, at a discount. This allows the business to receive cash quickly rather than waiting for customers to pay their invoices. Leveraging involves using borrowed funds to increase returns, short-selling involves selling securities that have been borrowed in the hopes of buying them back at a lower price, and discounting involves obtaining a loan based on the value of accounts receivable. None of these options involve selling accounts receivable to a third-party company, so they are not the best choice for this question.

______ Involves a Business Selling Its Accounts Receivable to Either