Which of the following statements about factoring is true?

A) Factoring firms sell the receivables of other firms.
B) Factoring involves the outright sale of a firm's accounts receivable to the factor.
C) The firm, not the factor, bears the risk of collecting bad receivables in a factoring arrangement.
D) The borrowing firm is able to obtain a greater advance against inventory in a factoring
arrangement than in a typical line of credit secured by accounts receivable.

B