Working of AR. and AP.

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AR and AP are accounting terms. AR refers to money owed to a company, while AP refers to money a company owes to others.

AR stands for Accounts Receivable, which is the money owed to a company by its customers for goods or services provided.
AP stands for Accounts Payable, which is the money a company owes to its suppliers or vendors for goods or services received.
AR and AP are important for managing a company's cash flow and ensuring timely payments.
AR and AP are recorded in a company's balance sheet and income statement.
For example, if a company sells $10,000 worth of goods to a customer on credit, it would record $10,000 in AR. If the company buys $5,000 worth of goods from a supplier on credit, it would record $5,000 in AP.

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