Which of the Following Best Describes Recourse Factoring

Multiple Choice

Which of the following best describes recourse factoring?

A) The company, not the factor, assumes the financial loss for bad debts arising from credit sales.
B) Uncollectible accounts are covered by insurance. The insurance company keeps any amounts that it may recover from its own collection efforts.
C) For an additional fee, the factor assumes responsibility for collecting an agreed upon amount of bad debts but has no legal rights to act against the debtor.
D) The factor takes responsibility for bad debts and is legally entitled to pursue the debtor through the courts.
E) The initial factor bundles the bad debt contracts and sells them for a deep discount to a subcontractor.