Asked by Katelyn Tilden on May 28, 2024
Verified
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
The financial practice of selling a business's invoices to a third party to secure immediate cash flow.
- Detail the assortment of financial opportunities for small business ventures, embracing stakeholder funds, supplier credit, and factoring services.
Verified Answer
ME
Maxime EversJun 03, 2024
Final Answer :
D
Explanation :
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.
Learning Objectives
- Detail the assortment of financial opportunities for small business ventures, embracing stakeholder funds, supplier credit, and factoring services.
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