The sale of receivables to a third party is called
A)factoring.
B)collateralizing.
C)discounting.
D)securitization.

Question

Quizplus · Accepted Answer

Factoring refers to the sale of accounts receivables to a third party at a discount in exchange for immediate cash. Collateralizing refers to providing an asset as security against a loan. Discounting refers to the process of borrowing money against a promissory note, with the amount loaned being less than the face value of the note. Securitization refers to the process of converting assets, such as mortgages, into securities that can be sold to investors.

The Sale of Receivables to a Third Party Is Called