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
Beth Clark is an Accounting Manager at Specialty Products Corp.  One afternoon in early January 2012, her boss, Controller Dan Greene, met with her and stated the following, "Beth,

Draw a stem-and-leaf plot for the data set. (Enter numbers from smallest to largest separated by spaces. Enter NONE for stems with no values.)  Data set A: The annual wages of

Q. Explain about Freight collect? Freight collect indicates the buyer should initially pay the freight bill on the arrival of the goods. To demonstrate the use of these terms s

untangible assets


There is a point where stockholding costs are equivalent to ordering costs

Q. Neutrality of accounting information? The Neutrality signifies that the accounting information must be free of measurement method bias. The primary concern must be relevance

Billable expenses are those expenses incurred by you on behalf of your client in performing duties / supply and service. These expenses are recoverable from your customer by way of

Accounts payable subsidiary ledger Accounts are designed to show balance owed to every creditor. Liability accounts generally have credit balances. Accounts are not assigned nu

Q. Steps used in retail inventory method? The retail inventory method approximation the cost of the ending inventory by applying a cost/retail price ratio to ending inventory s