Is "accounts Receivable" an Asset?


Quick Answer

On a business balance sheet, accounts receivable are considered assets. Accounts receivable represent what is owed to a business that supplies goods and services to other businesses without payment upfront.

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Full Answer

A business that provides goods and services to other businesses or clients on credit with the promise of payment may establish payment terms that include full or installment due dates. Once payments are received, the business's balance sheet is updated. The accounts receivable column is debited to record that payments have been made. This amount is moved to the cash column or revenue column to record changes to business profits.

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