The sale or transfer of accounts receivable to raise funds is called

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Factoring involves selling or transferring accounts receivable to a third party, usually a financial institution, in exchange for immediate cash. The third party then collects the outstanding debts from the original debtor. Discounting, collateralizing, and pledging refer to different ways of using accounts receivable as collateral for loans, but do not involve the sale or transfer of the receivables.

The Sale or Transfer of Accounts Receivable to Raise Funds