The Services Provided by an Accounts Receivable Factor to the Borrower

question 50

Multiple Choice

The services provided by an accounts receivable factor to the borrower may include:

• A)performing credit checks on potential customers.
• B)collecting cash from customers.
• C)assuming the bad debt risk when customers of factored accounts do not pay.
• D)All of the above

---

Definitions:

Autarky

An economic system wherein a country or entity is self-sufficient and does not engage in international trade.

Producer Surplus

The difference between what producers are willing to accept for a good or service and the actual price they receive, representing the benefit to producers.

Total Surplus

The total net gain to consumers and producers from trading in a market; the sum of the producer surplus and the consumer surplus.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually pay.