Accounts Receivable: The department of a large company whose function is to send bills to companies that owe money. There's more to it than that, but who cares?

 

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Accounts Receivable: The department of a large company whose function is to send bills to companies that owe money. There's more to it than that, but who cares?

Average Collection Period, Or Days Receivables: The ratio of accounts receivables to sales, or the total amount of credit extended per dollar of daily sales (average AR/sales 365).

Allowance For Noncollectible Accounts: A contra account, deducted from Accounts Receivable, that shows the estimated losses from uncollectible accounts.

Receivables: Accounts receivable; an amount that is owed the business, usually by one of its customers as a result of the ordinary extension of credit,

Net Realizable Value Of Accounts Receivable: The net amount that would be received if all receivables considered collectible were collected: equal to total accounts receivable less the allowance for uncollectible accounts: also called . . . View Full Definition

Number Of Days Sales In Receivables: A measure of the average number of days it takes to collect a credit sale: computed by dividing 365 days by the accounts receivable turnover.

Receivables Turnover Ratio: Total operating revenues divided by average receivables. Used to measure how effectively a firm is managing its accounts receivable.

Receivables Balance Fractions: The percentage of a month's sales that remains uncollected (and part of accounts receivable) at the end of succeeding months.

Accounts Receivable Turnover: The ratio of net credit sales to average accounts receivable, which is a measure of how quickly customers pay their bills.

Account Receivable Turnover: A measure used to determine a company's average collection period for receivables: computed by dividing net sales (or net credit sales) by average accounts receivable.