Is Accounts Receivable a Liability or Asset

Accounts Receivable is considered an asset on the balance sheet. It represents the amount of money that a company is owed by its customers for goods sold or services rendered on credit. As such, it’s an asset because it represents a future economic benefit that the company is entitled to receive. The classification of Accounts Receivable as an asset is a fundamental concept in accounting, and it helps to reflect the company’s potential cash flow from outstanding customer payments.