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

Quizplus · Accepted Answer

Maturity factoring is when the factor receives payment on the normal payment date of the invoice, whereas advance factoring is when the factor advances payment to the firm before the normal payment date of the invoice. Both methods of factoring accounts receivable are valid options for firms to consider in managing their cash flow.

In Considering Factoring Accounts Receivable, Which of the Following Statements