Amounts To Be Received In The Future Due To The Sale Of Goods Or Services Is What

Amount To Be Received Or Collected From Customers In Future Due To Sales On Account Or Credit Sales Is What?

Amount to be received in the future due to the sale of goods (or sale of merchandise) or services is called Accounts Receivable or Sundry Debtor, as it represents the payment due from customers against the goods sold or services performed to them by the company in the specified time period. The company earned the revenue but the customers did not pay, so the company billed to customers / clients for informing them to make payment in time.

Accounts receivable is created when goods or merchandise sold on account / credit i.e., Sales on Account or Credit Sales is made. It is a Current Asset (having life equal to one year or less than one year) and shown on the Balance Sheet at Net Realizable Value or Book Value. It is convertible into cash very quickly.