accounts receivable (A/R)

Related Terms
Sales made but not paid-for by the customers (trade debtors). Accounts receivables are shown as current (short-term) assets in a balance sheet and are, in fact, unsecured promises by customers to pay in the future. These sums are a key factor in determining a firm's liquidity and may be discounted used in raising a short-term bank loan, or sold to a factor. A provision is usually made in the accounts of a firm to offset uncollectible accounts receivable (bad debts) as losses.

Use 'accounts receivable (A/R)' in a Sentence

John thought he had made enough sales to meet his quota for the month, but when he took a closer look at his figures, he saw that most of them were only accounts receivable.
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Susan was upset to find out that her check had bounced and, despite her years of faithful patronage, her name had been sent to accounts receivable for collection.
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If we could find better ways to get our customers to pay on time we could decrease the amount in accounts receivable and increase our cash flow.
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