Accounts recievables
Lets try to understand one of the most important terms that you come across in the accouting world. It is Accounts Receiveable (in short it is generally written as A/R).
If a company sells a good or service to the customer on credit (lets say $1,000). The company will make the following entry in its Balance Sheet. The below is how a Delta Balance sheet will look for this transaction:
Debit | Credit |
Inventory ($1,000) A/R $1,000 |
In other way
Debit | Credit |
A/R $1,000 | Inventory $1,000 |
individual or another firm) in his/her balance sheet
Debit | Credit |
Assets $1,000 | A/P $1,000 |
Now that leads us to another important term Accounts Payable denoted as A/P.
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