Accounts receivable are frequently converted into cash in lower than a time, which makes them fall under the current asset order. In case an AR isn’t converted to bad debt and is held for further than a time, it’ll become a fixed asset. Accounts receivable are collected within about two month’s time and are regarded as short term assets.
In conclusion, accounts receivable is considered an asset. It is the amount of money that a corporation expects from its client that may have invested in their goods and services. It is a very valuable asset because it stands for future cash flow and could be utilized for future investments. Corporations should be careful and keep track of their accounts receivable so they need not have to deal with any outstanding debt later on.