sale of gar rsquo s accounts receivable to ross with the risk of uncollectible accou 604400

Gar Co. factored its receivables. Control was surrendered in the transaction which was on a without recourse basis with Ross Bank. Gar received cash as a result of this transaction, which is best described as a

1. Loan from Ross collateralized by Gar’s accounts receivable.
2. Loan from Ross to be repaid by the proceeds from Gar’s accounts receivable.
3. Sale of Gar’s accounts receivable to Ross, with the risk of uncollectible accounts retained by Gar.
4. Sale of Gar’s accounts receivable to Ross, with the risk of uncollectible accounts transferred to Ross.