ACCA · Question 03 · Working Capital Management
Section A
AgriGrow Co, a large agricultural cooperative, is experiencing cash flow difficulties due to late payments from major supermarket chains. The finance director is considering either factoring or invoice discounting.
Which TWO of the following statements regarding factoring and invoice discounting are correct?
Answer options:
Factoring usually involves the factor taking over the administration of the sales ledger.
Invoice discounting provides bad debt protection (non-recourse) as a standard feature.
Invoice discounting is generally confidential, meaning customers are unaware of the arrangement.
Factoring is always cheaper than invoice discounting due to economies of scale.
32 questions · hints · full answers · grading
Expert