Which of the Following Statements About Factoring Is True

question 96

Multiple Choice

Which of the following statements about factoring is true?

• A) The firm, not the factor, bears the risk of collecting bad receivables in a factoring arrangement.
• B) Factoring involves the outright sale of a firm's accounts receivable to the factor.
• C) The borrowing firm is able to obtain a greater advance against inventory in a factoring arrangement than in a typical line of credit secured by accounts receivable.
• D) Factoring firms sell the receivables of other firms.

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