Accounts Receivable Definition

Looking for a simple accounts receivable definition? Accounts receivable is an asset account which consists of all the money that is owed to you or your company from customers and anyone else that you have extended credit to.

It is reflected on the balance sheet as an asset account because the expected income from your accounts receivable increases your total equity or net worth.

Account Receivable Aging Report

An accounts receivable aging report gives a breakdown of how much is owed to you, who owes it and when it is due.

It is usually broken down into three columns: 1) current, 2) 30-60 days past due, 3) over 90 days past due.

If you are operating on an accrual basis and a portion of your accounts receivable becomes non-collectible, you would right it off as bad debt.

Collecting Accounts Receivable and Bad Debt

There are several ways you can go about collecting accounts receivable and bad debt. Here are some options...

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