Accounts Receivable Definition | Patriot Software

Accounting Definitions

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Accounts Receivable Definition

Accounts receivable is money due from a customer to the business that generated the service or product. Accounts receivable is also known as AR.

Accounts Receivable Extended Definition 

Accounts receivable is money owed to a business and is used to track the lines of credit a company extends to customers.

Using the accrual method of accounting, if payment is not received at the time of the transaction, the balance due is considered accounts receivable to the business.

The total amount of receivables are reported on a financial statement called a Balance Sheet.

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Last Updated By

Andrew Freiman | Feb 23, 2023

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