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The assignment of accounts receivable journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting relating to the assignment of accounts receivable.
In each case the journal entries show the debit and credit account together with a brief narrative.
The factoring accounts receivable journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of accounts receivable factoring.
In each case the journal entries show the debit and credit account together with a brief narrative.
When a business sells products and services to a customer on account, the goods are delivered and the sales invoice is created, but the customer does not have to pay until the invoice due date. The invoice is posted to the customers account and becomes an accounts receivable balance until the amount is paid by the customer.
In the meantime, the business has its cash tied up in the customer account receivables until the customer pays on the invoice due date. However, by using factoring, the business can release this cash by selling the invoices to a third party, normally called the factor.