Accounts receivable - ar, Accounting Basics

Money payable by customers (individuals or corporations) to the other entity in exchange for goods or services that have been given or used, but not yet paid for. Receivables typically come in the form of operating lines of credit and are generally due within a comparatively short time period, varying from a few days to a year. 

On a public company's balance sheet, accounts receivable is frequently entered as an asset as this presents a legal obligation for the customer to pay cash for its short-term debts

If a company has receivables, this shows it has made a sale but has still to collect the money from the buyer. Most companies function by allowing a little portion of their sales to be on credit. This kind of sales are generally made to frequent or special customers who are invoiced regularly, and allows them to evade the hassle of physically making payments as every transaction takes place. In other words, this is when a customer provides a company an IOU for goods or services previously received or rendered.

Accounts receivable are not restricted to businesses - individuals have them too. People get receivables by their employers in the form of a bi-weekly or monthly paycheck. They are legally paid this money for services (work) already given. 

When a company pays debts to its suppliers or other parties, these are referred to as accounts payable.

 

 

 

Posted Date: 7/27/2012 3:46:12 AM | Location : United States







Related Discussions:- Accounts receivable - ar, Assignment Help, Ask Question on Accounts receivable - ar, Get Answer, Expert's Help, Accounts receivable - ar Discussions

Write discussion on Accounts receivable - ar
Your posts are moderated
Related Questions
what is the accounting concepts and conventions? and what is the procedure to follow the accounting formats

Selling the rights to the quantity owing by debtors to a finance company for an agreed amount (which is a lesser amount of than the figure at which they are recorded in the account

Different Methods Of depreciation Diminishing Value Method Straight Line Method Annuity Method Depletion Method Written Down value Method

Q. What is classified balance sheet? The balance sheets we presented thus far have been unclassified balance sheets. An unclassified balance sheet has three major categories li

what are the basic theory of accounting

1. For what reasons do corporations purchase the stock of other corporations? 2. Explain how marketable securities should be classified in the balance sheet. 3. Describe the valu

Answer the following questions in 200 to 300 words: · Nonprofit organizations are required to produce financial statements based on the accrual method of accounting

Question 1 Briefly explain the functions of accounting Question 2 Explain the three branches of accounting Question 3 What is single entry system? What are the advantages and

The 31st December 2009 trial balance of Anika Co. reported the following information. Dr. Cr. Allowance for Bad Debts........................... $2,300 During the year 2010 t

Definite the meaning of accounting equation