Accounts receivable are:

Accounts receivable are:

• A. Fixed Assets
• B. Intangible Assets
• C. Current Assets
• D. Liabilities

Answer: (C)

Accounts receivable are amounts customers owe you for goods or services sold on credit. Because these payments are expected to be collected in the near term, they are classified as current assets on the balance sheet. They aren’t fixed assets (long-term physical items like buildings or equipment) or intangible assets (non-physical items like patents or goodwill), and they aren’t liabilities (obligations you owe to others). In practice, they’re reported at net realizable value, accounting for potential bad debts, since some customers may not pay in full. Managing receivables affects liquidity and working capital—the quicker you convert them to cash, the better your cash flow.

Accounts receivable are amounts customers owe you for goods or services sold on credit. Because these payments are expected to be collected in the near term, they are classified as current assets on the balance sheet. They aren’t fixed assets (long-term physical items like buildings or equipment) or intangible assets (non-physical items like patents or goodwill), and they aren’t liabilities (obligations you owe to others). In practice, they’re reported at net realizable value, accounting for potential bad debts, since some customers may not pay in full. Managing receivables affects liquidity and working capital—the quicker you convert them to cash, the better your cash flow.