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Dear sir,
in the normal circumstances, what would have been the recording of this transaction where, we factored our receivable and we are still bearing all risk and reward? if the amount received is less than the amount of receivable. where are we recording the difference?
Your question confuses me – 🙁 sorry
If it’s a genuine factor transaction with risks and rewards transferred, the double entry would be:
Dr Cash
Dr Finance Expenses
Cr ReceivablesIf it isn’t a genuine factor transaction, the entry should be:
Dr Cash
Cr Loan accountand if the company has treated it as a genuine one and it isn’t, then we need to “undo” / reverse the bad entries and replace them with the correct entries
Ok?
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