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Question
If a company sells its debtors to another party to raise funds, it is known as _______________.
If a company sells its debtors to another party to raise funds, it is known as _______________.
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Solution
The correct option is D Factoring
Factoring is a type of financial arrangement in which firms sales its debtors to a third party on a certain discount to improve the immediate cash inflow of the organization. The financial institution who is doing the factoring is referred as factor.
Factoring is a type of financial arrangement in which firms sales its debtors to a third party on a certain discount to improve the immediate cash inflow of the organization. The financial institution who is doing the factoring is referred as factor.
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