Recievables

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December 4, 2018 at 1:20 pm #487177
snahs
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I was doing a FM mock exam,

The question:
A company has sold its trade receivables at a discount to another party with possible recourse.
a- Letter of credit
B- Factoring
c- Forfaiting
d- Invoice discounting

The answer is B
but why not c
December 4, 2018 at 1:42 pm #487182
f6ali
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Because the question mentions ‘with possible recourse’. Forfaiting is usually non-recourse. Factoring can be with recourse and non-recourse.
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