Account Receivable

Claim against a debtor for an uncollected amount, generally from a completed transaction of sales or services rendered.

Accounts receivable are amounts owed by customers for credit sales or services on account, representing expected cash inflows and requiring follow-up for collection.

- Used in day-to-day bookkeeping and journal entries to record transactions correctly.
- Used when preparing trial balances and reconciling accounts.

- Example: Accountants use **Account Receivable** when recording transactions and preparing the trial balance.

- Why it matters: Ensures accurate records, supports reliable reporting, and reduces posting and reconciliation errors.