In accounting, what does accounts receivable refer to?

Accounts receivable refers specifically to the money owed to a business by its customers for goods or services that have been delivered but not yet paid for. This amount represents a legal obligation for the customers to pay the business in the future and is recorded as an asset on the balance sheet. It reflects credit sales and indicates that the company is expecting cash inflow from these receivables, which aids in managing cash flow and financial planning.

Understanding accounts receivable is crucial for financial health assessment, as it shows the efficiency of a business in collecting payments and managing credit. Companies must monitor this to ensure they maintain sufficient cash flow for operations. Other financial terms in the question, such as cash balance and obligations to be paid, refer to different aspects of financial management that do not encompass the specific notion of money owed to the business by customers.