alleryStart learning →In US accounting, how does invoice discounting differ from factoring?
AIt sells the debtor goods
BIt is a loan on receivables
CIt moves credit risk abroad
DIt uses a forfaiter only
Answer & Solution
Correct answer: B. It is a loan on receivables
Factoring is an outright sale of receivables, while invoice discounting is borrowing against receivables as collateral.
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