Accounts receivable are

Accounts receivable are

• A. Money owed to you at the end of the year
• B. Cash on hand
• C. Goods held for sale
• D. Money you owe to others

Answer: (A)

Accounts receivable are amounts customers owe you for goods or services you have already delivered on credit. They are an asset because they’re a future cash inflow you expect to receive, making them part of your current assets on the balance sheet. This isn’t cash you have on hand, and it isn’t inventory (goods you’re still holding for sale). It also isn’t money you owe to others; that would be accounts payable. At year-end, the balance represents invoices that are still unpaid, though some may eventually be uncollectible.

Accounts receivable are amounts customers owe you for goods or services you have already delivered on credit. They are an asset because they’re a future cash inflow you expect to receive, making them part of your current assets on the balance sheet. This isn’t cash you have on hand, and it isn’t inventory (goods you’re still holding for sale). It also isn’t money you owe to others; that would be accounts payable. At year-end, the balance represents invoices that are still unpaid, though some may eventually be uncollectible.