ECONOMICS

Detailed explanation-1: -Business liabilities are, by definition, the amounts owed by a business at any one time. They’re often expressed as “payables” for accounting purposes. Unless you’re running a complete cash business (paying and collecting only cash), your business probably has liabilities.

Detailed explanation-2: -What is accounts receivable? Accounts receivable – sometimes called trade receivable – is any money that your customers or clients owe you for a service or product they bought on credit. This money can be from goods they put on their store accounts, or from any unpaid invoices for services.

Detailed explanation-3: -Accounts receivable refer to the money a company’s customers owe for goods or services they have received but not yet paid for. For example, when customers purchase products on credit, the amount owed gets added to the accounts receivable. It’s an obligation created through a business transaction.

Detailed explanation-4: -A company’s accounts payable (AP) ledger lists its short-term liabilities-obligations for items purchased from suppliers, for example, and money owed to creditors. Accounts receivable (AR) are funds the company expects to receive from customers and partners. AR is listed as a current asset on the balance sheet.