Factoring Refers to an Arrangement in Which a Company Sells

question 54

True/False

Factoring refers to an arrangement in which a company sells its receivables to another company and receives cash immediately.

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Definitions:

License

A legal permission granted by an authority to conduct business, use intellectual property, or undertake certain activities.

Market

A venue or system where buyers and sellers interact to trade goods, services, or financial instruments.

Cost Driver

A factor that causes the cost of an activity or process to change, used in activity-based costing to allocate costs more accurately.

Support Department

Units within an organization that provide essential services or support to the primary operations departments but do not directly participate in production activities.