Accounts receivable (A/R) is one of a series of accounting transactions dealing with the billing of a customer for goods and services

they have ordered. In most business entities, accounts receivable is typically executed by generati ng an invoice and either mailing or electronically delivering it to the customer, who, in turn, must pay it within a n established timeframe, called credit terms or payment terms. Accounts receivable departments use the sa les ledger. An example of a common payment term is Net 30, which means that payment is due a t the end of 30 days from the date of invoice. The debtor is free to pay before the due date; most business entities offer a di scount for early payment. Other common payment terms include Net 45 and Net 60. Accounts receivable (A/R):- Money owed by customers (individuals or corporations ) to another entity in exchange for goods or services that have been delivered o r used, but not yet paid for. Receivables usually come in the form of operating li nes of credit and are usually due within a relatively short time period, ranging from a few days to a year. On a public company's balance sheet, accounts receivable is often recorded as a n asset because this represents a legal obligation for the customer to remit cash for its short-term debts. If a company has receivables, this means it has made a sale but has yet to colle ct the money from the purchaser. Most companies operate by allowing some portion of their sales to be on credit. These type of sales are usually made to frequent or special customers who are invoiced periodically, and allows them to avoid the hassle of physically making payments as each transaction occurs. In other words, this is when a customer gives a company an IOU for goods or services already rec eived or rendered. Accounts receivable are not limited to businesses - individuals have them as wel l. People get receivables from their employers in the form of a monthly or bi-weekly paycheck. They are legally owed this money for se rvices (work) already provided. When a company owes debts to its suppliers or other parties, these are known as accounts payable.

What Does Income Statement Mean? A financial statement that measures a company's financial performance over a spe cific accounting period. Financial performance is assessed by giving a summary of how the business incurs its revenues and expenses through both operating and non-operating activities. It also shows the net profit or loss incurred over a specific accounting period, typically ove r a fiscal quarter or year.Also known as the "profit and loss statement" or "statement of revenue and expense". The income statement is the one of the three major financial statements. The oth er two are the balance sheet and the statement of cash flows. The income statement is divided into two parts: the operating and non-operating sections. The portion of the income statement that deals with operating items is interesti ng to investors and analysts alike because this section discloses information about revenues and expenses that are a direct result of the regular business operations. For example, if a business creates sports equipment, then the operating items section would talk about the revenues and ex penses involved with the production of sports equipment. The non-operating items section discloses revenue and expense information about

activities that are not tied directly to a company's regular operations. For example, if the sport equipment company sold a factory and some old plant eq uipment, then this information would be in the non-operating items section.

Sign up to vote on this title
UsefulNot useful