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    Question

    Who are the participants involved in a typical Trade

    Receivable arrangement?
    A Buyer, seller, and bank Correct Answer Incorrect Answer
    B Buyer, supplier, and government Correct Answer Incorrect Answer
    C Buyer, lender, and Investors Correct Answer Incorrect Answer
    D Supplier, bank, and Debtors Correct Answer Incorrect Answer
    E Seller, government, and Investors Correct Answer Incorrect Answer

    Solution

      In a typical Trade Receivable arrangement, the primary participants involved are the buyer, seller, and bank . The buyer is the entity purchasing goods or services on credit from the seller . The seller is the entity providing the goods or services and generating the receivable from the buyer . The bank, often acting as a financing institution, provides funds to the seller by discounting or factoring the trade receivable . This allows the seller to receive immediate payment, while the bank assumes the responsibility of collecting the receivable from the buyer at a later date . The involvement of a bank in a Trade Receivable arrangement helps provide liquidity to the seller and mitigates the risk of non - payment by the buyer .

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