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make a conclusion why accounts receivable and long-term liabilities are important for accounting

make a conclusion why accounts receivable and long-term liabilities are important for accounting

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Ans: Account receivable are very much important for accounting as they are considered to be lifelihod of any business as they help us to calculate the profitability and act as an indicator for the business income.

Account receivable simply are the parties to whom we provide our services or sells goods , if there are no account receivables that means there is very less operations in the business and profit is very much less

whenever to calculate the profitability always add up the account receivables with the assets less the liabilities

Long-term liabilities are an important part of a company’s long-term financing. Companies usually take on long-term debt to fund the purchase of capital assets or invest in new capital projects not always invest their own money, usually takes fund from the market in the form of loans. It is also helpful in determining A company's long term solvency

As If companies are unable to repay their long-term liabilities as they become due, then the company will face a solvency crisis so it mainly helps us to determine or check the company status of a solvency crunch.

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