12 Questions
What is the responsibility of the factor in a factoring arrangement?
Sales ledger administration
Which legislation regulates factoring business in India?
Factoring Regulation Act, 2011
How does factoring benefit businesses?
Enhances efficiency in managing receivables
In full-service factoring, who bears the losses if the buyer fails to pay?
The factor
What does factoring involve?
Sale of receivables
What is the primary function of financial markets?
Determine the price of commodities
What do financial markets rely on to determine prices?
Demand and supply forces
Which institutions are major purveyors of credit in India?
Commercial banks and non-banking financial companies
What characterizes the term structure of the credit market?
The duration of credit - short-term, medium-term, long-term
In financial markets, how are prices typically determined?
Through a process known as price discovery
What role do non-institutional sources of credit play in the credit market?
Provide credit alongside institutional sources
Why do financial markets operate with low transaction costs?
To attract more participants to trade
Learn about factoring as a financing arrangement in business, where companies get cash against their outstanding invoices. Explore the responsibilities of the factor, regulations governing factoring, and different types of factoring such as full-service factoring. Understand how factoring involves selling receivables to a factor for immediate payment.
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