Which of the Following Is a Disadvantage of Factoring

question 42

Multiple Choice

Which of the following is a disadvantage of factoring?

• A) ensures an uneven pattern of cash flows
• B) eliminates credit and collection departments
• C) turns accounts receivable into cash quickly
• D) highly expensive source of short-term financing

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Definitions:

Traditional Authority

The inherited right of individuals to expect loyalty and obedience from others; authority based in custom and tradition.

Rational-Legal

A concept in sociology that describes a form of governance or organization founded on laws, rules, and procedures rather than on traditional or charismatic authority.

Favoritism

The practice of giving unfair preferential treatment to one person or group at the expense of others.

Nepotism

Favoritism shown to relatives or friends by those in power, often by providing them employment.