What are Accounts Receivable?

Accounts receivable is money owed to you by your customers for service or goods you’ve sold them on credit.

How is the balance of Accounts Receivable determined?

When you issue an invoice to a customer, your Accounts Receivable balance increases by the amount of the invoice.

When your customer pays you an invoice, your Accounts Receivable balance decreases by the amount of the payment.

When you issue a credit note to a customer, your Accounts Receivable balance decreases by the amount of the credit note.

Accounts Receivable is listed on the Balance Sheet as a Current Asset.