________ is the selling, at a discount, of long-term accounts receivable of the seller or promissory notes of the foreign buyer.
A) Forfaiting
B) Countertrading
C) Confirming
D) Factoring

Question

Quizplus · Accepted Answer

Forfaiting is the selling of long-term accounts receivable or promissory notes of a foreign buyer at a discount. This type of trade finance is used when the buyer cannot obtain traditional bank financing, and the seller wants to receive payment immediately without assuming any credit risk. Factoring, on the other hand, is the selling of short-term receivables of the seller to a factor at a discount, while countertrading refers to the exchange of goods or services between countries without using cash. Confirming is a service provided by banks to small businesses to ensure the creditworthiness of a buyer and guarantee payment.

________ Is the Selling, at a Discount, of Long-Term Accounts