Factoring Refers To

question 18

Multiple Choice

Factoring refers to:

• A)determining the aging schedule of the firm's trade receivables.
• B)the sale of a firm's trade receivables to a financial institution.
• C)the determination of the average collection period.
• D)scoring a customer based on the 5 C's of credit.
• E)All of the above.

---

Definitions:

Irrelevant Costs

Costs that will not be affected by a decision and should not be considered when making that decision.

Periodic Basis

A method of accounting where financial and inventory records are updated at regular, fixed intervals.

Resale Value

The expected price at which an asset can be sold in the market after it has been used.

Incremental Costs

The additional costs incurred when a company increases production by one unit.