RJR Nabisco sells its export receivables to a firm that takes responsibility for collecting payment from the importers. RJR has used

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Factoring involves selling accounts receivable to a third party, who then assumes responsibility for collecting payment. This is the most appropriate choice for RJR Nabisco's situation where it sells its export receivables to a firm that takes on the responsibility of collecting payment from importers. A is incorrect because accounts receivable financing is a type of loan secured by accounts receivable. C is incorrect because forfaiting involves selling long-term receivables, such as export receivables, at a discount, and the buyer assumes the risk of non-payment. D is incorrect because a letter of credit is a payment guarantee issued by a bank to ensure payment will be made to the exporter.

RJR Nabisco Sells Its Export Receivables to a Firm That