accounts receivable

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accounts receivable

The accountant reviews the accounts receivable ledger.

Definition

Noun (plural form, treated as singular or plural) * Money owed to a business by its customers: This term refers to the total amount of money that customers are legally obligated to pay a company for goods or services that have been delivered or used but not yet paid for. It represents a line of credit extended by the seller and is considered a current asset on the company's balance sheet.

Usage
  • "Accounts receivable" is a standard accounting term. It functions as a plural noun but can be treated as singular when referring to the total sum or the department managing it.
  • It is often abbreviated as AR in business contexts.
  • It is the opposite of accounts payable (money the company owes to others).
Examples
  • The company's accounts receivable have increased this quarter, indicating more sales on credit.
  • She works in the accounts receivable department, following up on overdue invoices.
  • Managing accounts receivable effectively is crucial for maintaining healthy cash flow.
  • The balance sheet shows $50,000 in accounts receivable.
Advanced Usage
  • Aging of accounts receivable: A report that categorizes unpaid customer invoices by their due date (e.g., 0-30 days, 31-60 days, 61-90 days past due) to assess credit risk.
  • Accounts receivable turnover: A financial ratio that measures how efficiently a company collects revenue from its credit sales.
Variants and Related Words
  • Receivable (adj./n.): As an adjective: capable of being received. As a noun (often plural: receivables): a debt owed to a business, synonymous with accounts receivable.
  • Debtor: A customer or entity that owes money, contributing to the accounts receivable total.
  • Invoice: The itemized bill sent to a customer, which creates an entry in accounts receivable.
Synonyms
  • Receivables
  • Trade receivables
  • Debtors (commonly used in British accounting)
Related Phrases
  • To collect on accounts receivable: The process of obtaining payment from customers.
  • To write off an account receivable: To remove an uncollectible debt from the accounts receivable ledger, recognizing it as a loss.
accounts receivable

The accountant reviews the accounts receivable ledger.

Noun
  1. a creditor's accounts of money owed to him; normally arise from the sale of products or services