Question

Gemstone Jewelers obtains needed short-term funds by selling its accounts receivable to the Friendly Finance Company. Friendly Finance usually pays Gemstone about 80% of the value of the receivables. Gemstone Jewelers utilizes ________ as a means of raising short-term funds.

Answer 1

factoring

Step-by-step explanation:

Based on the scenario being described it can be said that the Gemstone Jewelers utilizes factoring as a means of raising short-term funds. This is a type of debtor finance where the business sells its accounts receivables to a third party company at a discounted value in order to meet the present and immediate cash concerns that the company is currently facing.