Question

companies sometimes convert receivables to cash before they are due. when a company sells its receivables, the buyer is called a

Answer 1

The buyer is called a factor.

Step-by-step explanation:

When a company sells its receivables, it is called factoring. The company sells its accounts receivable to a third party, known as a factor, at a discount. The factor then takes over the responsibility of collecting the receivables from the customers. The company receives cash upfront, which it can use to finance its operations. The factor earns a profit by collecting the full amount of the receivables from the customers. Factoring is a common practice in business, especially for companies that need to improve their cash flow or do not want to take on additional debt.