Accounts receivable (A/R),
Definition of Accounts receivable (A/R):
Money owed to a company by its debtors.
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?
- 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.
- Another selling point is the companys current $310,000 in accounts receivable (with payables of about $130,000).
- 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.
- 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