111k views
1 vote
Is a 'receivable' (e.g. accounts receivable) an asset or liability?

a) Asset
b) Liability

User Leyna
by
8.2k points

1 Answer

4 votes

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
by
8.0k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.