Factoring Is a Form of Short-Term Financing Which Involves

question 31

Multiple Choice

Factoring is a form of short-term financing which involves

• A) actually selling accounts receivable to a financial institution at a discount from face value.
• B) pledging accounts receivable as collateral for a short-term loan.
• C) using a percentage of current assets as collateral for a short-term loan.
• D) selling inventory to a factor with an agreement to repurchase it at a set time in the future.

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Definitions:

Binding Precedent

A previous case that a particular court must follow.

Courts

Institutions that interpret and apply the law to resolve disputes and administer justice in civil, criminal, and administrative matters.

Precedent

A legal decision or case that serves as an example or authority for deciding subsequent cases involving similar facts or issues.

Executive Memorandum

An official document from an executive branch, such as the President or a governor, that provides directions or actions for government agencies to follow, less formal than an executive order.