Net receivables
Accounts receivables are unpaid sales
transactions that customers owe to the company. They are already recorded on
the books but the physical cash payment is arranged at a later date. A company
allows customers to pay for an item or service at a later date in full or installment.
Now when some of the payments cannot be collected from customers, those accounts
that cannot be received are subtracted from the anticipated receivables and
then we get the net receivables.