Accounts Receivable Overview
Accounts receivable is always recorded as a debit. It reflects the money your customers owe you for goods or services delivered on credit. It’s a potential cash inflow, an asset that bolsters your company’s financial standing.
Accounts Receivable as Credit
When credited, accounts receivable represents a reduction in the amount owed by customers.
Accounts Receivable and Bill Receivable Comparison
Accounts receivable generally has a debit balance, but in some situations, the balance can be credit too.
Bill Receivable Explanation
Bills receivable are amounts due to the business for goods sold or services provided.
Key Points on Debits and Credits for Accounts Receivable
Accounts receivable are both debit and credit entries in your accounting ledger.
Normal Balance of Accounts Receivable
Accounts receivable is an asset on the left side and is normally a debit balance.
Understanding Accounting Basics
Debit increases an asset or expense account, credit increases a liability, equity, or revenue account.