In financing terms, what is factoring?
A) buying the accounts receivable of other firms
B) selling the accounts payable to other firms
C) dividing the accounts receivable and forgiving some of the receivables
D) dividing the accounts payable and forgiving some of the debt

Question

Quizplus · Accepted Answer

Factoring refers to the process of buying the accounts receivable of other firms. The factor takes ownership of the invoices and collects payment directly from the customer, providing immediate cash flow to the firm that sold the invoices.

In Financing Terms, What Is Factoring