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Finance Dictionary and Glossary of Investment Terms
Money owed by customers.
Money which is owed to a company by a customer for products and services provided on credit. This is treated as a current asset on a balance sheet. A specific sale is generally only treated as an account receivable after the customer is sent an invoice.
Money owed to a business for goods or services purchased on credit. Most businesses extend credit; although restaurants, supermarkets and others are paid on the spot for the things they sell, businesses generally grant 30 days or more to pay. Thus, when a sale is made, a ""receivable"" is recorded in the assets column of the balance sheet. Receivable turnover is an important indicator of how effectively a firm is collecting on its receivables, and whether a cash crisis might be in the offing