Accounts receivable (A/R)

Accounts receivable (A/R),

Definition of Accounts receivable (A/R):

  1. Money owed to a company by its debtors.

  2. Sales made but not paid-for by the customers (trade debtors). Accounts receivables are shown as current (short-term) assets in a balance sheet and are, in fact, unsecured promises by customers to pay in the future. These sums are a key factor in determining a firms liquidity and may be discounted used in raising a short-term bank loan, or sold to a factor. A provision is usually made in the accounts of a firm to offset uncollectible accounts receivable (bad debts) as losses.

How to use Accounts receivable (A/R) in a sentence?

  1. Susan was upset to find out that her check had bounced and, despite her years of faithful patronage, her name had been sent to accounts receivable for collection.
  2. Another selling point is the companys current $310,000 in accounts receivable (with payables of about $130,000).
  3. If we could find better ways to get our customers to pay on time we could decrease the amount in accounts receivable and increase our cash flow.
  4. John thought he had made enough sales to meet his quota for the month, but when he took a closer look at his figures, he saw that most of them were only accounts receivable .

Meaning of Accounts receivable (A/R) & Accounts receivable (A/R) Definition