SESKStuff Everyone Should Know
SESK: Stuff Everyone Should Know · sesk.info/founder-accounts-receivable

What does accounts receivable represent?

Accounts receivable is money customers owe for credit sales or services.

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  1. Cash already deposited
  2. Bills owed to suppliers
  3. Amounts customers owe ✔

Why: A credit sale creates an amount due from the customer. It is an asset, but it does not become cash until the customer pays.

Huh, didn't know that: An allowance for bad debts estimates receivables that may not be collected.

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Receivables sent a reminder because they were tired of waiting.
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References

Answer: Amounts customers owe. A credit sale creates an amount due from the customer. It is an asset, but it does not become cash until the customer pays.

  1. IRS Corporation Returns Explanation of Terms www.irs.gov/pub/irs-soi/03cosec5.pdf
    accounts receivable were the gross amounts arising from business sales or services to customers on credit
    Checked 2026-10-11.

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