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deff fn [24]
4 years ago
10

2. Why are accounts receivable considered assets even if the money has not yet been paid to the business?

Business
1 answer:
Strike441 [17]4 years ago
5 0

The payee has a legal obligation to submit the funds.

Explanation:

Once a transaction is agreed upon it becomes a legal obligation of the payee to pay the business owner.

<u>Accounts receivable are thus counted in the balance sheets as liquid funds or current funds as they are converted into cash in less than an year is most cases. </u>

In such a case that doesn't happen, they are counted as long term assets of a company. Any potential income guaranteed by legality is counted in the balance sheet as assets.

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