Multiple choice

An arrangement by which the receivables are sold to another for a consideration is known as factoring.

  1. True

  2. False

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Factoring is indeed a financial arrangement where a business sells its receivables (accounts receivable) to a third party (factor) at a discount in exchange for immediate cash. This helps businesses improve cash flow by converting credit sales into cash.