Record Receivables as Assets on Your Balance Sheet

by Greg DePersio

0 min read

Receivables are an asset on your balance sheet. When you make a sale, your business either receives cash or extends credit to the customer. If your business extends credit to the customer, an income statement account increases and the asset account receivable (the amount the customer owes you) also increases. The receivables account, which is on the balance sheet, needs to be recorded to track the amount you are owed.

Assets are further broken out into current and long-term categories. Short-term receivables are generally due to be paid to you within a year and fall into current assets. Long-term receivables are for customers that have been extended credit for over a year.

Related Articles

Analyzing Cash Flow: How to Use Cash Flow Statement

The cash flow statement is one of the three major financial reports…

Read more

What is Cash Flow and How Does it Affect Me?

Your business needs a steady supply of cash to operate successfully. It’s…

Read more

Get Paid On Time The Complete Guide to Invoices

For freelancers and self-employed people, invoicing is an essential part of your…

Read more