Definition of Factoring
Q. What is Factoring?- Published on 20 Jul 15a. An easy way of raising capital from a factoring company by small business
b. Selling of account receivables on a contract basis for cash payment to a factor before it is due
c. An arrangement for raising short term money against prepaid expenses
d. A method of discounting of long term bills
ANSWER: Selling of account receivables on a contract basis for cash payment to a factor before it is due
The three parties involved are the ones who purchase the receivable, the ones who sell the receivable, and the debtors who have a Financial Liability.
