Accounts receivable (AR) represent sales that a company has made on credit; the product has been sold and delivered, but the company has not yet received the cash for the sale.
Recall that during 2005, the lemonade stand recorded revenues of $100 on its income statement.
We previously assumed that the company collected the entire revenue amount in cash.
Now assume that the company collected $50 in cash and $50 on credit.
Based on the new information, create the appropriate T-account for the transaction.