The practice of raising funds for a business through the sale of accounts receivable is known as which of the following?

A) leasing
B) floor planning
C) balloon notes
D) factoring accounts receivable

Factoring accounts receivable involves a business selling its accounts receivable (i.e., invoices) to a third party (the factor) at a discount, in order to raise funds quickly rather than waiting for the invoices to be paid by customers. This practice provides immediate cash flow to the business.