Accounts Receivable (Trade Credit)
Amount customers owe for goods/services already delivered.
Real World
When Marks & Spencer sells goods to a corporate client on 30-day credit terms, the unpaid invoice sits as accounts receivable on M&S's balance sheet until payment arrives, tying up cash that cannot be used elsewhere.
Exam Focus
When 'analysing' working capital, explicitly link high receivables to cash-flow risk and potential bad debt write-offs.
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