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Accounts receivable and accounts payable are key financial terms found on the balance sheet. The balance sheet displays what you own (assets) and what you owe (liabilities) at a specific point in time. On the left side are assets like cash, receivables, inventory, and fixed assets. On the right side are liabilities like payables, accrued liabilities, debt, and equity. The sum of the left and right amounts must be equal. It explains the journal entries for accounts receivable and accounts payable, emphasizing the importance of balance in financial statements.
