Also called simply Receivables and listed on the Balance Sheet, Accounts Receivable are the amounts that customers owe the company. Customers can be any mixture of individuals, other companies or government organizations, and even other divisions within the same company.
This figure is listed because companies often allow credit sales to customers, who then pay at a later date. This figure is typically not simply the total sales on credit, but the total credit sales minus the total sales that the company has estimated to be un-collectable. This un-collectable amount is often called the "allowance for doubtful accounts" or "allowances". In relation to accounting practices, Accounts Receivable is often used in the accrual basis of accounting.
