if the factoring contract stipulates that the sale of accounts receivable is not accompanied by recourse, that is, when the sold accounts receivable cannot be recovered at maturity, financial institutions such as banks cannot recover from the enterprises that sell accounts receivable, and the risks of the sold accounts receivable are entirely borne by financial institutions such as banks. In this case, it shall be deemed that the assignment of accounts receivable has been completed, and the following accounting entries shall be made: debit the account of "bank deposit" according to the actual amount received, debit the account of "bad debt provision" according to the amount of bad debt provision of the sold accounts receivable, credit the account of "accounts receivable" according to the book balance of the sold accounts receivable, and debit or credit the account of "financial expenses" according to the difference.
if the factoring contract stipulates that the sale of accounts receivable is accompanied by recourse, that is, when the sold accounts receivable cannot be recovered at maturity, banks and other financial institutions will return the originally assigned accounts receivable to the enterprise. It can be seen that the main risk of accounts receivable sold by enterprises has not been transferred to banks and other financial institutions. The essence of this factoring business is to obtain a bank loan from banks and other financial institutions on the condition that accounts receivable are used as a loan. In this case, the following accounting entries should be made: debit the account of "bank deposit" and credit the account of "short-term loan". The original records of accounts receivable, bad debt provision and other subjects will not be changed when the money has not been received, so as to fully reflect the real situation of enterprise accounts receivable factoring business.
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