Accounts Receivable

Accounts Receivable refers to the amount of money owed to a company by its customers or clients for goods or services that have been provided on credit. It represents the outstanding invoices or bills that have not been paid by the customers at a given point in time. When a company sells its products or services on credit, it creates an account receivable for the customer. This means the customer has a specified period, usually 30 to 90 days, to pay the amount owed. The company treats the accounts receivable as an asset on its balance sheet, representing the amount of money it expects to collect in the future.