What is indicated by the term 'AR' in accounting?

The term 'AR' in accounting typically refers to Accounts Receivable. This designation indicates the amounts of money owed to a business by its customers for goods or services that have been delivered but not yet paid for. It is an essential component of a company's balance sheet and is classified as a current asset because it represents a claim for future cash inflows.

Understanding Accounts Receivable is crucial for managing cash flow, as it impacts the liquidity of the business. Organizations closely monitor AR to ensure that they collect payments timely to maintain operations and fulfill their obligations. By assessing the age of receivables, businesses can gauge the effectiveness of their credit policies and collection processes.

In contrast, the other options refer to different financial concepts that do not align with the standard abbreviation of 'AR' in accounting. Hence, Accounts Receivable is the most accurate interpretation of the term in a financial context.