Selling Receivables to a Third Party at a Discount from Their

question 33

Multiple Choice

Selling receivables to a third party at a discount from their face value is referred to as:

• A) factoring
• B) receivables lending
• C) venture banking
• D) vendor financing
• E) mortgage lending

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Definitions:

Deductibility

The eligibility of an expense to be subtracted from gross income to reduce taxable income.

Pension Plans

Financial arrangements designed to provide individuals with an income during retirement, funded by either the employer, the employee, or both.

Income Tax Purposes

The specific calculations and methods used to determine taxable income and tax liabilities according to the regulations set by tax authorities.

Pension Plan

A pension scheme in which an employer is obliged to contribute to a fund allocated for an employee's future benefit.