When a company provides services for which cash will not be received until some future date, the company should record the amount billed as accounts receivable.

Question

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Accounts receivable represents the amount of money that a company expects to receive from its customers in the future, typically for services or goods that have already been provided but not yet paid for. Therefore, when a company bills for services but does not receive cash immediately, it should record the amount as accounts receivable on its balance sheet.

When a Company Provides Services for Which Cash Will Not