If a company decides to factor its receivables without recourse, it will:
A)offer the receivables to a lending institution as collateral.
B)sell receivables to a lender and remain liable for uncollectible accounts.
C)sell the receivables at a discount.
D)offer receivables that are more than 120 days old to a collection agency.
E)none of the above defines factoring receivables.

Question

Quizplus · Accepted Answer

Factoring receivables without recourse means the company sells its receivables to a factor (a financial institution) at a discount and is not responsible for collecting the receivables or for any receivables that are not collected.

If a Company Decides to Factor Its Receivables Without Recourse