Factoring involves a financial transaction where a business sells its accounts receivable to a third party (the factor) at a discount. The factor then manages the receivables, including collection from the debtors, thus administering the receivables of the concern.

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Factoring Means

Question 12

Multiple Choice

Factoring means .

A) financing against bills receivables.
B) financing invoices without recourse only.
C) purchasing and/or administering the receivables of a concern.
D) collecting the receivables and remitting to the seller.

Correct Answer: