Is accounts receivable considered equity?

Accounts receivable is an asset account that is not considered equity but is a factor in the formula used to calculate owner equity. Assets – Liabilities = Owners’ Equity Owner’s equity reports the amounts invested into the company by owners plus the cumulative net income of the business that has not been withdrawn or distributed to the owners.

Is account receivable an asset or a liability?

Classification of Account Receivable an Asset or a Liability? Account receivable is the amount outstanding to a company by its customers or clients and will get converted to cash in the future, therefore accounts receivables are classified as an asset. They are posted under current assets on the balance sheet.

Is accounts receivable a current asset?

Accounts receivable is listed on the balance sheet as a current asset. Any amount of money owed by customers for purchases made on credit is AR. Accounts receivable (AR) is an asset account on the balance sheet that represents money due to a company in the short term.