Bill Receivable Account

Bill receivable account is a personal account that represents the amount owed to a business by its customers for goods or services sold on credit. In accounting, personal accounts represent entities with whom a business has a financial relationship, such as customers, suppliers, or creditors.

Personal Account

A personal account is a type of account used in accounting that represents a person or entity with whom a business has a financial relationship. Personal accounts are classified into three categories:

1. Natural Personal Account – These accounts represent individuals, such as customers, suppliers, or creditors.

2. Artificial Personal Account – These accounts represent legal entities, such as companies, firms, or corporations.

3. Representative Personal Account – These accounts represent a group of individuals or legal entities, such as a group of creditors or debtors.

Types of Accounts

There are three types of accounts in accounting:

1. Real Account – These accounts represent tangible assets, such as land, buildings, machinery, or cash.

2. Nominal Account – These accounts represent expenses, revenues, gains, or losses, such as salaries, rent, interest, or sales.

3. Personal Account – These accounts represent individuals or entities with whom a business has a financial relationship, such as customers, suppliers, or creditors.

Conclusion

In conclusion, bill receivable account is a personal account that represents the amount owed to a business by its customers for goods or services sold on credit. Personal accounts are classified into three categories, including natural, artificial, and representative personal accounts. In accounting, personal accounts represent entities with whom a business has a financial relationship.

Bill receivable is a real account because it is mentioned in balance sheet.