Recent Examples of account receivable from the Web
Outside leadership changes, the utility has also struggled to turn over critical data to its independent auditor, such as accounts receivables from water bills.
President Trump issued an executive order on Monday preventing United States companies or citizens from buying debts or accounts receivable from the Venezuelan government.
Of the company’s accounts receivable, the trustee was only able to collect $30,000 — from Uresti.
His administration has been selling off debt held by government entities, including accounts receivable, for a pittance of its worth, the United States officials said, and has pocketed the cash, leaving Venezuela’s finances in shambles.
President Trump signed an executive order on Monday afternoon imposing the new penalties, which would bar United States companies or citizens from buying debt or accounts receivable from the Venezuelan government.
Accounts payable grew by nearly $530 million in 2017 to about $2.4 billion, while accounts receivable grew by just $15 million.
In a default notice, Oak's accounts receivable lender, Pacific Western Bank, of Chevy Chase, Md., disclosed large federal fines at three of the nonprofit's facilities.
The reports were meant to reflect the company’s eligible collateral, including inventory and accounts receivable.
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Financial Definition of ACCOUNT RECEIVABLE
What It Is
Accounts receivable (A/R) are amounts owed by customers for goods and services a company allowed the customer to purchase on credit.
How It Works
Let's assume that Company XYZ sells $1 million of widget parts to a widget manufacturer and gives that customer 60 days to pay for those parts. Once Company XYZ receives the order and/or sends the parts and/or sends the customer an invoice, it will decrease its inventory account by $1 million and increase its accounts receivable by $1 million. When 60 days has passed and Company XYZ is paid, it will increase cash by $1 million and reduce its accounts receivable by $1 million.
When accounts receivable go down, this is considered a source of cash on the company's cash flow statement, and as such, it increases the company's working capital (defined as current assets minus current liabilities). When accounts receivable goes up, this is considered a use of cash on the company's cash flow statement because the company is "stretching out" the time it takes to receive money owed to it and thus is using cash more quickly.
Why It Matters
Accounts receivable is an important factor in a company's working capital. If it's too high, the company may be lax in collecting what's owed too it and may soon be struggling to find the cash to pay the bills; if it's too low, the company may be unwisely harming customer relationships or not offering competitive payment terms. In general, accounts receivable leciels correspond to changes in sales levels.
Companies can sometimes use their receivables as collateral for borrowing money. The level of accounts receivable also affects several important financial-performance measures, including working capital, days payable, the current ratio and others.
It is important to note that uncollectible receivables do not qualify as assets (these uncollectible amounts are reclassified to the allowance for doubtful accounts, which is essentially a reduction in receivables); thus, companies usually allow only creditworthy customers to pay days, weeks or even months after they've received the company's services or goods. Sometimes companies sell their receivables for cents on the dollar to other companies that focus solely on collecting the owed amounts.
Learn More about account receivable
Britannica.com: Encyclopedia article about account receivable
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