factoring

What is the primary role of a factor in factoring?

• Offering advance payment

• Maintaining sales ledger

• Purchasing accounts receivables

• Providing advisory services

What is the main function of a factor in eliminating credit risk?

• Maintaining credit recording

• Providing working capital management

• Offering factorage services

• Taking over responsibility of book debts

What is the charge for short-term financing in factoring known as?

• Discount charge

• Commission fee

• Factorage

• Advance payment

In which type of factoring does the factor assume the credit risk of customer non-payment?

• Recourse factoring

• Non-recourse factoring

• Advanced factoring

• Maturity factoring

What is the main advantage of factoring for young businesses?

• Improved credit rating

• Expert knowledge for decision

• Better cash flow

• Better debt collection

What is a demerit of factoring related to the perception of creditors?

• Costly

• Distrust by creditors

• Over confidence

• Risky

What type of factoring involves the sale of accounts receivable arising from export transactions?

• Domestic factoring

• International factoring

• Agency factoring

• Supplier guarantee factoring

What is the main feature of undisclosed factoring?

• Factor assumes credit risk of customer non-payment

• Factor provides advance payment

• Customers are informed of the factor's involvement

• Business sells accounts receivable without notifying the debtor

What is the main function of a factor in agency factoring?

• Factor charges a commission for collection

• Factor maintains sales ledger and collects debts

• Factor and client share the work

• Factor provides finance and assumes credit risk

What is the main demerit of factoring related to the risk of fraudulent acts by the client?

• Costly

• Distrust by creditors

• Risky

• Uncertainty