Accounts Receivable is an asset account that records all short-term customer payments that have been made on credit. It’s called ‘Accounts Receivable’ because the company has a legal right to receive payment from its customers. And from an accounting perspective, this means that when Accounts Receivable increases, it’s recorded as a debit in the company’s books. On the other hand, when the amount of Accounts Receivable decreases, it’s recorded as a credit in the company’s books. So, for Accounts Receivable, we can say that a debit indicates an increase and a credit shows a decrease.