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Is a 'receivable' (e.g. accounts receivable) an asset or liability?

a) Asset
b) Liability

User Leyna
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1 Answer

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Final answer:

Accounts receivable is an asset, as it represents money owed to a company that is expected to be received in the future. It is not a liability, which is a company's debt or financial obligation. Bank's net worth is determined by subtracting liabilities from assets.

Step-by-step explanation:

An accounts receivable is considered an asset for a company. In accounting terms, it represents money that is owed to the company by its customers for goods or services that have been delivered or used, but not yet paid for. In a bank's balance sheet, similar to any business, assets are what the bank owns and are of value, such as cash, reserves, and loans issued to customers. On the other hand, a liability refers to any debt or obligation owed by the company, such as loans, mortgages, and customer deposits. According to the information provided, a bank's net worth is calculated as the value of its assets minus its liabilities. Receivables are included in a bank's assets, indicating what customers owe to the bank, and are an important component of its overall financial health.

User Alaster
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