Multiple choice

Under factoring, the functions of purchase of receivables, maintenance of receivable ledgers and collection of dues on due date become the function of

  1. seller

  2. factor

  3. buyer

  4. Both (1) and (3)
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A factor performs at least two of the following functions: i. Provides finance for the supplier, including loans and advance payments ii. Maintains accounts and ledgers relating to receivables iii. Collects receivables iv. Protects risk of default in payments by debtors

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