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Accounts receivable and accounts payable are financial terms found on the balance sheet, which is one of the financial statements. The balance sheet shows assets on the left and liabilities on the right, and the two sides must balance. Typical assets include cash, receivables, inventory, and fixed assets, while liabilities include payables, accrued liabilities, debt, and equity. Receivables are amounts owed to you, while payables are amounts you owe. Journal entries are used to record transactions related to these accounts.
