Sunday, June 24, 2018

Accounts Receivable

Accounts receivable are amounts due from customers who have purchased goods or services “on account.”  Such accounts are typically due within thirty days or on a certain date each month.

“Accounts Receivable” is a current asset account that is listed on the balance sheet.  “Accounts receivable” is the proper plural form of the singular, “account receivable.”

The quality of accounts receivable is an important aspect of financial statement analysis.  Analysts explore whether payments are being received in a timely manner as well as from whom the receivables are due and whether the customers are creditworthy.

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