________ is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash. A) Factoring B) Vendor credit C) Peer-to-peer lending D) Crowdfunding E) Leasing

The correct answer is A) Factoring. Factoring is a common financial practice for businesses that need cash immediately. Instead of waiting for customers to pay their outstanding invoices, a business can sell those invoices (accounts receivable) to a third party, known as a factor, at a discount. The factor then collects payment from the customers and keeps a fee for their services. The business receives immediate cash, which they can use to pay bills, invest in growth, or manage cash flow. Factoring is often used by businesses that have slow-paying customers or need to access cash quickly to capitalize on opportunities.