Purchasing accounts receivable (bills owed to the firm)at a discount is known as ________.
A)loaning funds
B)leasing
C)factoring
D)purchasing

Question

Quizplus · Accepted Answer

Factoring is the process of purchasing accounts receivable at a discount. This allows the firm to receive immediate cash flow and transfer the risk and responsibility of collecting the debt to the factoring company. Loaning funds, leasing, and purchasing assets are different financial actions that are not related to accounts receivable.

Purchasing Accounts Receivable (Bills Owed to the Firm)at a Discount