Amounts to be received in the future due to sale of goods or services?

Amounts to be received in the future due to sale of goods or services?

• A. Cash Flow Accounting System
• B. Inventory
• C. Accounts Payable
• D. Accounts Receivable

Answer: (D)

Accounts receivable represent amounts to be received in the future from customers for goods or services sold on credit. It is a current asset on the balance sheet that records revenue that has been earned but not yet collected in cash. The amount is typically shown net of an allowance for doubtful accounts to reflect potential uncollectible amounts. In contrast, inventory is the goods a company holds for sale, not amounts owed by customers; accounts payable is what the company owes to suppliers, a liability; and a cash flow concept isn’t a specific asset like receivables.

Accounts receivable represent amounts to be received in the future from customers for goods or services sold on credit. It is a current asset on the balance sheet that records revenue that has been earned but not yet collected in cash. The amount is typically shown net of an allowance for doubtful accounts to reflect potential uncollectible amounts.

In contrast, inventory is the goods a company holds for sale, not amounts owed by customers; accounts payable is what the company owes to suppliers, a liability; and a cash flow concept isn’t a specific asset like receivables.