Question

Accounts receivable represents:_________

A. Amounts which are owed to the company by its customers resulting from credit sales.
B. Amounts which are owed by the company to its suppliers for past purchases.
C. Amounts which have been borrowed to finance operations.
D. Amounts which are due to stockholders

Answer 1

A. Amounts which are owed to the company by its customers resulting from credit sales.

Step-by-step explanation:

When the company sells its product to the customers on a credit basis is called account receivable. The amount which is to be sold on credit comes under the account receivable. It is a liquidity ratio which can be converted into cash within one year

This account receivable comes under the current assets side in the asset section of the balance sheet