A Firm May Factor Its Accounts Receivable to a Bank

Multiple Choice

A firm may factor its accounts receivable to a bank or other financial institution in exchange for cash. Which of the following is/are not true?

A) The lender physically controls the receivables and collects cash from customers.
B) Accounts receivable that the firm has factored do not appear on the balance sheet.
C) The firm has sold the accounts receivable.
D) The firm should disclose the factoring arrangement in its financial reports.
E) None of the above.