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Mildred purchased a new dining room table and china cabinet from Discount Furniture, which offered a one-year special with no interest or financing charges. When Mildred makes her purchase, Discount Furniture checks her credit and seeks approval for her. Upon approval, Mildred receives information informing her that she will make payments to Regional Finance Company.
1. This arrangement is an example of ______________.a. unsecured bank loanb. factoringc. pledging accounts receivabled. commercial papere. selective financing

Respuesta :

luzgiussani

Answer:

The correct answer is option b. factoring.

Explanation:

Factoring is what is known in economy as a short-term financing alternative, which may also include business advisory services or information on a person's ability to meet their financial obligations.

The good thing about factoring is that it can be applied to any type of business.

Let's see how this method works:

A company gives a credit to a financial entity on the condition that it pays that amount of money. But this value will not only be the financial value, but factoring also includes extra services such as collection management or commercial advice.

The good thing about this method is that it allows you to transform credit sales into cash operations.

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