Geoff Works for a Company That Buys Accounts Receivables from a Firm

question 111

Short Answer

Geoff works for a company that buys accounts receivables from a firm for less than face value, but collects the face value of the accounts. Geoff works for a
sales finance company.
credit union.
trust company.
consumer finance company.
factoring company.

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Definitions:

Accounts Receivable Period

The average number of days it takes for a company to collect payments from its customers after a sale has been made.

Accounts Payable Period

The average number of days it takes for a business to pay off its trade creditors.

Credit

Refers to the trust allowing one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately but promises either to repay or return those resources at a later date.

Supplier

A person or organization that provides goods or services to another entity, typically as part of a supply chain.