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When the seller ships the 50,000 units to Walmart, it will include a bill for $1.5 million, which is 50,000 units at $30 per unit. Walmart then receives the books, and the seller is owed the money but hasn't yet been paid. That $1.5 million sits on the seller's balance sheet as an A/R.

You should be able to find a business's accounts receivable on its balance sheet. Specifically, they should be in the assets section. The business should list AR as a current or long-term asset, depending on the timeline of each transaction.

To document any accounts receivable, create an invoice (see below) which details the products or services your business provided to a customer, the amount owed for that product or service, including any sales taxes and extra fees (like for shipping a product) and the due date for payment.

Account receivable is the amount the company owes from the customer for selling its goods or services. The journal entry to record such credit sales of goods and services is passed by debiting the accounts receivable account with the corresponding credit to the Sales account.

The golden rule in accounting is that debit means assets (something you own or are due to own) and credit means liabilities (something you owe). On a balance sheet, accounts receivable is always recorded as an asset, hence a debit, because it's money due to you soon that you'll own and benefit from when it arrives.

An example of accounts receivable includes an electric company that bills its clients after the clients received the electricity. The electric company records an account receivable for unpaid invoices as it waits for its customers to pay their bills.