Which of the following is NOT a difference between factoring and securitization of receivables?
A) In securitization, many investors are involved, whereas factoring usually involves only one company.
B) Receivables are derecognized when securitized, but not when factored.
C) The quality of receivables factored tends to be lower than those securitized.
D) The seller retains responsibility to collect amounts due when securitized, but not when factored.

Question

Quizplus · Accepted Answer

In both factoring and securitization, receivables are typically derecognized from the seller's balance sheet. The key differences lie in the involvement of investors, quality of receivables, and collection responsibilities.

Which of the Following Is NOT a Difference Between Factoring