An account receivable represents
A) an asset with long-term use or value, such as land, buildings, and equipment.
B) an amount due from a customer who has purchased goods on credit.
C) an expense, such as rent, that is paid before the upcoming period in which it is due.
D) a nonphysical asset, such as a patent or trademark, that has economic value in the form of expected benefit.
E) an asset that can or will be converted to cash within the following year.

Question

Quizplus · Accepted Answer

An account receivable represents a payment due from a customer who has purchased goods on credit. It is an asset for the company, as it represents a future inflow of cash. Option A refers to fixed assets, option C refers to prepayments/accruals, option D refers to intangible assets, and option E refers to current assets in general, not specifically accounts receivable.

An Account Receivable Represents