Which of these is an entity who will buy accounts receivable before they are due on a discounted basis, with the spread between the discounted price and the receivable's face value providing them with the expected compensation for both the time value of money and for the expected level of defaults amongst the accounts receivable?
A) Commercial bank
B) Factor
C) Receiver
D) Blanket loaner

Question

Quizplus · Accepted Answer

A factor is a financial entity that purchases accounts receivable from companies at a discount before they are due, providing immediate cash to the company. The factor then collects the full amount on the receivables, earning a profit from the difference between the purchase price and the collected amount. This process is known as factoring.

Which of These Is an Entity Who Will Buy Accounts