Definition of Accounts Receivable (AR)?

Accounts Receivable is an accounting term that represents a company's short-term credit. It is found under Current Assets on a Balance Sheet and Operating Activities on the Cash Flow Statement.

Accounts Receivable is when a customer owes money to the firm because they have received a good or service but have not yet paid for it. For example, purchasing a car on credit would come under Accounts Receivable for the firm you bought it from, as you have received the car but have not yet paid for all of it.