Which of These Is an Entity Who Will Buy Accounts

question 115

Multiple Choice

Which of these is an entity who will buy accounts receivable before they are due on a discounted basis, with the spread between the discounted price and the receivable's face value providing them with the expected compensation for both the time value of money and for the expected level of defaults amongst the accounts receivable?

• A) Commercial bank
• B) Factor
• C) Receiver
• D) Blanket loaner

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Definitions:

Harvest

The process or period of gathering in crops.

Life Tenant

An individual who has the right to use and benefit from property during their lifetime, but cannot sell or transfer the property.

Extract Minerals

The process of removing solid minerals from the earth, which are then used in various industries and products.

Fixture

An item of property that is attached to a building or land in such a way that it becomes part of the real property.