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factoring

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › factoring

  • This topic has 4 replies, 2 voices, and was last updated 9 years ago by MikeLittle.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • November 3, 2015 at 8:56 am #280193
    mansoor
    Participant
    • Topics: 424
    • Replies: 542
    • ☆☆☆☆

    a quick question:

    i have a debt of 100 on my books as receivable.
    i factor it and get 100 and the terms are such that its a loan.

    so i will setup the entry as follows:

    Dr Debts Factored (or whatever its formally called) 100
    Cr Liability 100
    ————————
    and the balance in Receivables remains in the books as it is. .. correct?

    now, lets say i get 80 from the factor and its still a loan

    Dr Debts Factored 80
    Liability 80
    ————————
    and the balance in Receivables remains in the books as it is. .. correct?

    thanks

    November 3, 2015 at 9:59 am #280197
    mansoor
    Participant
    • Topics: 424
    • Replies: 542
    • ☆☆☆☆

    please ignore .. the debit shd be cash!!…

    November 3, 2015 at 1:43 pm #280272
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23322
    • ☆☆☆☆☆

    And the last 20 debit should be expenses

    And you’re never in this world going to get $100 for factoring $100 of debt

    And basically the entry is
    Dr Cash 80
    Dr Finance Costs 20
    Cr Loan Account 100

    OK?

    November 3, 2015 at 3:35 pm #280334
    mansoor
    Participant
    • Topics: 424
    • Replies: 542
    • ☆☆☆☆

    thank u!

    November 3, 2015 at 4:06 pm #280346
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23322
    • ☆☆☆☆☆

    You’re welcome

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    Posts
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