Accounts Receivable
Accounts receivable definition
Accounts receivable as an accounting term represent all money that the company’s customer owe to that company.
Accounts receivable increase
Accounts receivable increase when the company sells its products or services, but agrees with the customer to collect the cash later.
Accounts receivable decrease
Accounts receivable decrease when the company’s customers repay the money owed.
Interpretation and the big picture
In general having too much money in accounts receivable is a bad sign, as the company must find sources of financing for them. Accounts receivable are part of the company’s working capital.
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