Accounts Receivable

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Definition: Accounts Receivable

Generally, each organization provides credit facility to its customers. In such cases, the money owed to the business by its customers (individual or corporation) on account of products/services that have been delivered or used is referred to as accounts receivable.

Accounts Receivable is treated as an asset by the business and can be found under the “Current Assets” of the Assets section of a balance sheet.

The customers which owe the business are commonly referred to as “Sundry Debtors”.

Technically, an entry which entails credit has both receivables as well as payables. For the organization lending credit, it is accounts receivable while for the organization which owes money, it is an accounts payable.


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