Which of the following statements regarding factoring is not true?
A)receivables lending is the process of factoring
B)factoring is done at a discount to the third-party purchaser
C)factoring discounts are often a function of the riskiness of the receivables
D)factoring speeds the inflow of cash to the seller of the receivables

Question

Quizplus · Accepted Answer

Factoring is the process of selling accounts receivable to a third-party purchaser (factor) at a discount in exchange for immediate cash. Receivables lending is a type of asset-based lending where a lender provides a loan based on a company's accounts receivable as collateral, but it is not the same as factoring.

Which of the Following Statements Regarding Factoring Is Not True