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

On the other hand the below entry is made by the customer (may be an
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.