Q-2: What is factoring? Explain?
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Factoring, receivables factoring or debtor financing, is when a company buys a debt or invoice from another company. ... In this purchase, accounts receivable are discounted in order to allow the buyer to make a profit upon the settlement of the debt.
Explanation:
Factoring is a type of financing in which one company buys another company's accounts receivable, i.e., its invoices (money it is owed). ... In algebra, 'factoring' (UK: factorising) is the process of finding a number's factors. For example, in the equation 2 x 3 = 6, the numbers two and three are factors.
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