Accounts receivable are the amounts a business is entitled to receive from customers for goods or services sold on credit.

It arises when:

A company sells goods or services

Payment is not received immediately

The customer promises to pay later

Accounts receivable are shown as a current asset in the balance sheet.

Example:
If a business sells goods worth ₹30,000 on credit, that amount becomes accounts receivable until the customer pays.

In simple terms, accounts receivable means money customers owe to the business for credit sales.