Is accounts receivable an asset?

Yes, accounts receivable is classified as a current asset on a company’s balance sheet. It represents money that is expected to be received from customers for sales made on credit within a short period, typically under one year. Since it indicates incoming cash, it contributes to a business’s liquidity. Monitoring accounts receivable is essential to ensure customers pay on time. If receivables remain unpaid for too long, they may be written off as bad debts, impacting a business’s financial performance.