Discuss the Difference Between Transferring Receivables with and Without Recourse

question 30

Essay

Discuss the difference between transferring receivables with and without recourse.
When a company transfers receivables to the factor without recourse the factor pays the company a percentage of the total receivables and in effect it is a sale of the receivables to the factor.
The factor takes the receivables with recourse if any uncollected receivables can be returned to the company for a refund.

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