Accounting and Bookkeeping

Accounts Receivable

Note: Articles published before January 1, 2017 may be out of date. We are in the process of updating this content.

Dec 27, 2018

Accounts receivable (AR) are monies owed to the organization by another party. Typically, accounts receivable are recorded when services are rendered to earn revenue for the organization or promises to give are received by the organization. Promises to give are typically not recorded unless there is a signed pledge card or award letter stating the amount being promised and an approximate time period under which it will be paid. Below are example journal entries for accounts receivable.

Accounts Receivable Journal Entry

The receipt of an accounts receivable item is typically reflected in a deposit made to your cash account. When you have accounts receivable, it is vital to review it before assigning revenue accounts to your deposits to make sure you remove any accounts receivable you have so you do not double count revenue.