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AFP CTP Exam - Topic 5 Question 21 Discussion

In a private label financing arrangement, the seller does which of the following?
D) Loses authority to decide which customers receive credit.
A) Commits funds to finance accounts receivable.
B) Operates its own credit function as a subsidiary.
C) Receives the full face value of the sale in most cases.

AFP CTP Exam - Topic 5 Question 21 Discussion

Actual exam question for AFP's CTP exam
Question #: 21
Topic #: 5
[All CTP Questions]

In a private label financing arrangement, the seller does which of the following?

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Suggested Answer: D

by Brittani at Apr 11, 2026, 03:47 AM

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Lisha
I think the seller commits funds to finance accounts receivable.
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Shawnta
5 days ago
B) is interesting, but not always the case!
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Serina
10 days ago
D) is definitely a downside, losing control over credit decisions.
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Willard
15 days ago
Wait, C) sounds too good to be true.
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Lennie
2 months ago
Totally agree, that's how it works!
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Kattie
2 months ago
A) is correct, they commit funds to finance receivables.
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Nadine
3 months ago
I vaguely recall something about the seller losing authority in credit decisions, so option D might be relevant, but I need to double-check that.
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Blair
3 months ago
I feel like the seller usually receives the full face value of the sale, which makes me think option C could be correct.
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Annette
3 months ago
I remember a practice question where the seller had to decide on customer credit, so I'm leaning towards option D, but it feels a bit tricky.
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Micah
3 months ago
I think the seller commits funds to finance accounts receivable, but I'm not entirely sure if that's the right choice.
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