Asked by Camila Ramirez on Jul 13, 2024
Verified
A finance company that buys other companies' accounts receivable for less than they are worth and assumes the responsibility for collecting the debt is known as a:
A) lockbox.
B) factor.
C) collateral.
D) brokerage.
E) conciliator.
Factor
A finance company to which businesses sell their accounts receivable—usually for a percentage of the total face value.
- Discern the assortment of short-term financing sources and grasp their use-cases and cost implications.
Verified Answer
SY
Steven YarbroughJul 16, 2024
Final Answer :
B
Explanation :
A factor is a financial entity that purchases receivables from companies at a discount and takes on the responsibility of collecting the debts, providing immediate cash flow to the selling company.
Learning Objectives
- Discern the assortment of short-term financing sources and grasp their use-cases and cost implications.