Question

Factoring is

• A. An easy way of raising capital from a factoring company
• B. Selling of account receivable on contract basis at a discount to a third party
• C. A method of discounting of long term bills
• D. A method of compounding of long term bills

Answer 1

Answer:

B. Selling of account receivable on contract basis at a discount to a third party

Factoring allows a business to sell its receivables to a factoring company at a discount to get immediate cash.