Factoring receivables:
A)means selling them at a discount to a financial organization.
B)means the seller is always responsible for losses from uncollectible accounts.
C)means the seller must do all of its own credit and collection functions.
D)means the borrowed funds must be repaid to the lending company periodically.

Question

Quizplus · Accepted Answer

Factoring receivables means selling them at a discount to a financial organization. The seller is relieved of the responsibility of collecting the receivable and in case of non-payment, the financial organization bears the loss. The borrowed funds do need to be repaid, but the repayment terms and schedule are negotiated between the seller and the financial organization.

Factoring Receivables