Section A

AeroCater Services provides specialized inflight meals to commercial airlines. The company is experiencing cash flow difficulties due to airlines taking up to 90 days to settle invoices. AeroCater is considering using either invoice discounting or factoring.

Which of the following statements correctly distinguishes factoring from invoice discounting?

Invoice discounting is always disclosed to the customer, whereas factoring is strictly confidential.

Factoring typically includes the administration of the client's sales ledger, whereas invoice discounting does not.

Invoice discounting provides protection against bad debts (non-recourse), whereas factoring never does.

Factoring is only available for export sales, while invoice discounting is used for domestic sales.