The process of recovering debts by selling accounts receivable to an outside company is called what?

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Multiple Choice

The process of recovering debts by selling accounts receivable to an outside company is called what?

Explanation:
Factoring is the process of selling accounts receivable to an outside company to convert outstanding invoices into immediate cash. The outside firm, a factor, advances most of the invoice value and then collects payment from customers, often for a fee. This differs from debt financing, which is borrowing money, and equity financing, which involves selling ownership; and from liquidity ratios, which are metrics, not a method of recovering debts.

Factoring is the process of selling accounts receivable to an outside company to convert outstanding invoices into immediate cash. The outside firm, a factor, advances most of the invoice value and then collects payment from customers, often for a fee. This differs from debt financing, which is borrowing money, and equity financing, which involves selling ownership; and from liquidity ratios, which are metrics, not a method of recovering debts.

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