An unpaid balance of money owed to your business by customer accounts

• A. Accounts Receivable
• B. Accounts Payable
• C. Revenue
• D. Expenses

Answer: (A)

The unpaid balance owed by customers from sales on credit is called accounts receivable. It’s an asset because it represents money you are still expecting to collect, forming a future cash inflow for the business. You’ll typically see it listed as a current asset on the balance sheet, since it’s usually collected within a short period.

This concept differs from accounts payable, which is money your business owes to others. It also differs from revenue, which is the total income recognized from sales (whether or not cash has actually been received yet). Lastly, expenses are the costs incurred in running the business. So the unpaid customer balance fits the idea of an asset—an expected cash receipt—rather than an obligation, income, or cost.