What is it called when a sale made to a customer on credit and creates ar on balance sheet known as?

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2026-05-14 16:10

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When a sale is made to a customer on credit, it creates an account receivable (AR) on the balance sheet. This transaction reflects the amount owed to the company by the customer for goods or services delivered but not yet paid for. The account receivable is considered an asset because it represents a future inflow of cash.

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