Accounts Receivable Definition
This is the amount of
money that a firm or an organization gets to other firms or parties for any
sales of goods and services provided on account. Accounts Receivable is an
asset to that organization and this is presented in the Balance Sheet as part
of the Total Assets of that firm. This is one kind of current assets. This is
also known as Debtors too.
Importance of Accounts Receivable
Accounts Receivable is one
of the major Assets for an organization. The organization must identify exact
amount of money that the firm gets to other firms to know about the exact
position of the firm. Identifying Accounts Receivable helps to compare overall position
of the firm and compare the performance with performance of other years and
with other firms in the same industry.
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