Chapter 4

Question 1

Accounts Receivable?

Answer 1

Accounts receivable, or AR, is the amount of money that customers owe a business for products or services that have been delivered but not yet paid for.

Question 2

Accounts Payable?

Answer 2

Accounts payable is the money a business owes to its vendors, which still needs to be paid. Payables appear on a company’s balance sheet as a current liability.