"When utilizing a Factor to sell your receivables, all could be true except"

Question

BlackTom AI · Accepted Answer

In questions about selling receivables to a factor, several statements could be true depending on the terms of the factoring arrangement. 
Option B: 'They must be sold without recourse back to the selling company.' This statement is not universally true, because factoring can be done with or without recourse. In a recourse arrangement, the seller retains the risk of non-payment, and the factor can seek repayment from the seller if a receivable proves uncollectible. 
If the question is asking for the exception (the statement that could be false), the idea that receivables must be sold without recourse is too restrictive and not a requirement of all factoring agreements. Many factors offer recourse or mixed forms, and the choice depends on negotiated terms, the seller’s credit, costs, and risk tolerance. 
Why the other possibilities (if any) could be true: while not provided here, standard statements often include that factors advance a portion of the invoice, that fees or factoring charges apply, or that the agreement specifies notification and assignment of receivables. Each of those are common elements of factoring, though exact terms vary by contract. 
Key misconceptions to avoid: assuming a universal recourse-free sale ignores the risk allocation practices in factoring; assuming there is always recourse ignores non-recourse products and the price premium those would entail.

33:390:430:90 TREASURY MANAGEMENT Quiz Chapter 3 - Banks and Financial Institutions

"When utilizing a Factor to sell your receivables, all could be true except"

查看解析

登录即可查看完整答案

类似问题

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

People born without creativity never can develop it

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

Which of the following statement regarding cost is correct:

Under the assumptions used in cost-volume-profit analysis, as the activity increases:

The CVP and break-even analysis are supported by a range of important assumptions. Which of the following is not an assumption of the CVP:

The break-even point is that at which:

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单