The process of selling receivable for an amount less than the face value of the receivable is called:
A)factoring.
B)securitizing.
C)receivables financing.
D)recapitalizing.

Question

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Factoring is the process of selling a company's receivables to another company (called a factor) for less than the face value of the receivable. The factor then assumes the responsibility of collecting the payment from the customer. This allows the company to receive immediate cash for their receivables instead of waiting for the customer to pay, but at a discount. Securitizing involves pooling a group of similar assets (such as receivables) and selling securities backed by those assets. Receivables financing is a general term that can refer to any type of financing that is secured by receivables. Recapitalizing involves restructuring a company's capital structure, often by issuing new debt or equity securities.

The Process of Selling Receivable for an Amount Less Than