Question

The process of selling trade debts of a clints to a financial intermediary is called

Answer 1

The process of selling trade debts of a client to a financial intermediary is called——— a. Bill discounting.

Answer 2

Factoring.

Explanation:

• When a firm buys a debt or invoice from another company, it is known as factoring, receivables factoring, or debtor financing.
• In many markets, factoring is considered a sort of invoice discounting and is quite similar to invoice discounting, although in a different context.
• Accounts receivable are discounted in this transaction in order for the buyer to profit from the debt settlement.
• Factoring essentially transfers account ownership to a third party, who subsequently collects the loan.