Money customers owe you for invoices you've sent.
Accounts receivable is money owed to the business — invoices sent to customers that haven't been paid yet. It's an asset on the balance sheet: a legal claim to cash that's on its way.
A/R is born when you invoice (debit accounts receivable, credit revenue) and dies when the customer pays (debit cash, credit accounts receivable). The classic bookkeeping error is recording that payment as new income instead of applying it against the invoice — which double-counts the sale and leaves the invoice showing unpaid forever.
You invoice a client $1,500 on the 1st; they pay on the 25th. For those 24 days the $1,500 lives in accounts receivable. The A/R aging report groups every unpaid invoice by age — current, 30, 60, 90+ days — and is effectively your collections to-do list.
Accounts Payable (A/P) · Bad Debt · Unearned Revenue — or browse the full plain-English glossary.
Reading a definition is the easy part — the Daily Challenge (ten questions a day, free, no signup) is how terms like this become reflexes. Going for certification? Start with the free ProAdvisor readiness check.