Accounts Receivable Definition

What are Accounts Receivable?

Accounts Receivable are amounts which are owed to you by your customers, they are sometimes referred to as Trade Debtors.

When you allow your customer credit and invoice them for a product or service and receive payment at a later date 30 days 60 days etc, then while they owe you the money they are classified as Accounts Receivable.

Accounts Receivable are recorded in the balance sheet of the business under the heading Current Assets, that means they are convertible into cash within a year.

For further information on a Accounts Receivable see the Wikipedia definition.

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Last modified January 22nd, 2018 by Michael Brown

About the Author

Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.

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