Accounts Receivable Legal Meaning and Definition

Here is a simplified definition of the legal term Accounts Receivable.

Accounts Receivable (noun): Refers to the money owed to a business by its customers for goods or services that have already been delivered but not yet paid for. This is usually recorded as a current asset on a company's balance sheet, signaling that payment is expected soon (typically within one year). It is also referred to as 'trade receivables.' For example, if a company sells a product to a customer on credit, the money owed for that product would become part of the company's accounts receivable.