account receivable

account receivable
pl. accounts receivable.
a claim against a debtor, carried on open account, usually limited to debts due from the sale of goods and services.
[1935-40]

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Any amount owed to a business as the result of a purchase of goods or services from it on a credit basis.

Although the firm making the sale receives no written promise of payment, it enters the amount due as a current asset in its books. Accounts receivable constitute a major portion of the assets of many companies, and they may even be sold or pledged as collateral to obtain loans. See also account payable; factoring.

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      any amount owed to a business by a customer as a result of a purchase of goods or services from it on a credit basis. The company making the sale does not receive an acceptance or promissory note (i.e., written orders or promises to pay) from the purchaser but merely enters the amount due as a current asset in its books. Accounts receivable constitute a major portion of the assets of many companies and tend to vary directly with sales.

      Accounts receivable may be sold to finance companies or pledged as collateral to obtain loans from commercial banks or finance companies. This kind of financing differs from factoring (q.v.) in that the company's customers are not notified that their accounts have been sold or pledged as collateral, and the company remains responsible for credit losses. This type of financing is frequently employed by smaller companies that cannot obtain additional credit from commercial banks and have no other highly liquid assets to offer as security.

      Although it offers a flexible source of credit, varying with the volume of sales, accounts-receivable financing is considered a relatively expensive form of borrowing. Compare account payable.

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Universalium. 2010.

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Look at other dictionaries:

  • account receivable — account re·ceiv·able / ri sē və bəl/ n pl accounts receivable: a balance due from a debtor on a current account Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. account receivable …   Law dictionary

  • account receivable — n. pl. accounts receivable the amount owed to a business by a debtor, usually for goods or services …   English World dictionary

  • account receivable — gautina suma statusas Aprobuotas sritis buhalterinė apskaita ir finansinė atskaitomybė apibrėžtis Suma, kurią gauti teisė atsiranda pagal sandorius arba teisės aktus. atitikmenys: angl. account receivable šaltinis Lietuvos Respublikos finansų… …   Lithuanian dictionary (lietuvių žodynas)

  • account receivable — account′ receiv′able n. pl. accounts receivable bus a claim against a debtor, usu. for the sale of goods or services • Etymology: 1935–40 …   From formal English to slang

  • account receivable — noun (plural accounts receivable) : a balance due from a debtor on a current account * * * pl. accounts receivable. a claim against a debtor, carried on open account, usually limited to debts due from the sale of goods and services. [1935 40] …   Useful english dictionary

  • account receivable — A debt, owed to an enterprise, that arises in the normal course of business dealings and is not supported by negotiable paper. For example, the charge accounts of a department store. But income due from investments (unless investments are the… …   Black's law dictionary

  • account receivable — A debt, owed to an enterprise, that arises in the normal course of business dealings and is not supported by negotiable paper. For example, the charge accounts of a department store. But income due from investments (unless investments are the… …   Black's law dictionary

  • account receivable — An account owing on an open account. 1 Am J2d Acctg § 2. See bills receivable …   Ballentine's law dictionary

  • account receivable — noun (plural accounts receivable) Date: 1936 a balance due from a debtor on a current account …   New Collegiate Dictionary

  • account receivable — noun Amount recorded as being owed by a customer for sales on credit or on account …   Wiktionary

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