Question

Factoring is

• A. A mathematical procedure frequently used in accounting
• B. Done by people called fractioners
• C. Simplified method developed for counting inventory
• D. A way companies can get cash quickly

Answer 1

The correct option is D

A way companies can get cash quickly

Explanation for correct option
Factoring :

1. Factoring is a type of finance in which a business would sell its accounts receivable (invoices) to a third party to meet its short-term liquidity needs.
2. Under the transaction between both parties, the factor would pay the amount due on the invoices minus its commission or fees.

Hence option(D) i.e. A way companies can get cash quickly is correct.