Money that customers owe to a company for products or services they have already received but not yet paid for. It represents sales the company has made on credit. Accounts receivable is listed as an asset on the balance sheet because it is expected to become cash in the near future.
A plumbing company completes $5,000 worth of work for a restaurant but tells them they can pay in 30 days. The plumber lists this $5,000 as accounts receivable on their balance sheet. When the restaurant pays two weeks later, the accounts receivable decreases and cash increases.
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