Which of the Following Is NOT an Advantage of Factoring

question 10

Multiple Choice

Which of the following is NOT an advantage of factoring?

• A) Accounts receivable immediately turned into cash.
• B) Elimination of credit and collection department.
• C) Creation of a known pattern of cash flows.
• D) The effective interest rate.

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Definitions:

Social Security Tax

Social Security tax is a payroll tax collected to fund the Social Security program, which provides retirement, disability, and survivorship benefits to qualifying individuals.

Federal Personal Income Tax

A tax levied by the U.S. federal government based on an individual's income, including wages, salaries, and investments.

Taxable Income

The portion of an individual's or entity's income used to determine how much tax is owed to the government.

Marginal Tax Rate

The amount of tax paid on an additional dollar of income, which varies depending on income levels and tax brackets.