Which of the Following Is NOT a Characteristic of Factoring

question 39

Multiple Choice

Which of the following is NOT a characteristic of factoring accounts receivable?

• A)A firm sells its accounts receivable to a finance company.
• B)Receivables are sold without recourse.
• C)The firm incurs any losses from nonpayment.
• D)Maturity factoring and advance factoring are the two basic ways of financing.

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Definitions:

Punitive Damages

Monetary compensation awarded in a lawsuit over and above actual damages, intended to punish the defendant for egregious conduct.

Restitution

The act of compensating for loss, damage, or injury caused; often involves the return of property to its rightful owner.

Rescind

To nullify, terminate, or abrogate a law, order, or agreement.

Contract Rescinded

The act of legally declaring a contract null and void, as if it never existed, typically due to fraud, mistake, or another reason making the contract not viable.