Factoring of Accounts Receivable: Seller vs. Factor Accounting & Journal Entries

Описание: Imagine you have millions in revenue, but you can’t pay your electric bill because all that wealth is locked in Accounts Receivable. When banks won't take your land as collateral and customers won't pay early, you call in the "Factor."

In this comprehensive lecture, we move past the technical jargon to tell the story of the Sale of AR. We analyze the interaction between a logical seller and a "sigorista" (risk-averse) factor. You will learn how to account for service charges, advanced interest, and the dreaded sales discounts that factors deduct upfront.

We walk through a detailed, multi-month illustration where we record every entry from two points of view: the Seller and the Factor. We’ll show you exactly how to handle sales returns, collections beyond the discount period, and how to prove your final Receivable from Factor balance. We wrap up by computing the actual Gain or Loss on Factoring to see who really came out ahead.

Video Timestamps
00:00 – Concept: Factoring as the Sale of Accounts Receivable
01:05 – Narrative: Why Companies Sell Their Receivables
02:40 – The "Smart" Factor: Understanding Service Charges & Interest
05:22 – Advanced Sales Discounts: Why the Factor Deducts Upfront
06:58 – Holdbacks: Factoring Receivables & Partial Cash Payments
08:35 – Comprehensive Illustration: 1M AR Sale Scenario
14:35 – Journal Entries: The Seller’s Perspective (Initial Sale)
18:01 – Adjusting for Collections Outside the Discount Period
20:41 – Accounting for Sales Returns & Final Cash Settlements
29:20 – Computation: Proving Gain or Loss on Factoring
33:15 – Journal Entries: The Factor’s Perspective (The Buyer)
44:50 – Economic Analysis: Profitability for the Factor
47:00 – Closing: Self-Study Tips & Next Lesson on Notes Receivable

Search Keywords
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