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This video tutorial explains the terms accounts receivable and accounts payable, their definitions, and their presence in financial statements. Accounts receivable refers to amounts owed to a business, while accounts payable signifies what a business owes to others. Both terms appear on the balance sheet, a key financial statement that displays what a company owns (assets) on the left and what it owes (liabilities) on the right. The balance sheet must balance, with total assets equal to total liabilities. Common assets include cash, receivables, and inventory, while liabilities may include payables and debt. Additionally, the video addresses the journal entries related to both accounts.
