Accounts receivable is something you would list as a current asset on your balance sheet.
It represents the amount of money that you are owed by your customers for goods or services that you have provided but have not yet been paid for.
On your balance sheet, you typically organize your assets in order of liquidity, with the most liquid assets at the top.
Therefore, you would usually place accounts receivable as one of the first items under current assets, as it is expected to be converted into cash within a relatively short period, typically within one year.
Your balance sheet structure would typically look like this:
- Current Assets
- Accounts Receivable
- Prepaid Expenses
- Other Current Assets
- Non-Current Assets (also known as long-term assets)
- Property, Plant, and Equipment
- Intangible Assets
- Other Non-Current Assets
Accounts receivable is an important line item on your balance sheet because it represents money that you expect to receive in the near future, and it can significantly impact your liquidity and financial health.