Think of Accounts Receivable as a happy thing, it’s the money someone owes you as you have already provided them with a service or product. Your balance sheet would show the transactions as something you have sold but are yet to receive payment for it from your customer.
For example…
Ok, think of when you visit a restaurant at a resort you’re staying at. You order and enjoy your meal. At this point, you owe the restaurant money, but you say “charge it to my room”. You do this again the following night. You haven’t paid the restaurant a cent, but the restaurant’s Accounts Receivable will record both meals and ensure you pay what’s owing when you checkout.
