When accounts receivable are factored: the borrower sells the receivable; accounts receivable balances are removed from the balance sheet; the customer payment is made to the factor; and interest is charged on the funds advanced.

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When accounts receivable are factored, the borrower sells the receivable to the factor and the receivable balance is removed from the balance sheet. The customer payment is subsequently made to the factor, and interest is charged on the funds advanced by the factor to the borrower.

When Accounts Receivable Are Factored: the Borrower Sells the Receivable;