Final answer:
Retailers usually don't have significant accounts receivable balances as transactions are often immediate, while manufacturing companies offer payment terms leading to higher accounts receivable due to the nature of B2B transactions.
Step-by-step explanation:
A retailer typically conducts transactions directly with the final consumer, often in a cash or cash-equivalent transaction (like credit card sales), so one would not expect significant accounts receivable balances in their financial statements. Retailers look to complete the sales cycle quickly and without the deferral of payment, which is common in B2B (business-to-business) transactions.
In contrast, a manufacturing company often deals with other businesses and may offer terms that result in delayed payments for goods delivered, leading to higher accounts receivable balances. Manufacturers may have to wait for their clients to sell the goods or complete the production cycle before receiving payments. For example, if a manufacturer supplies components to an automotive assembly plant, payment terms might range from 30 to 90 days, or even longer, resulting in significant accounts receivable on their balance sheet.