Which term refers to debts owed to a business?

The term that refers to debts owed to a business is accounts receivable. This term specifically describes the amounts that customers owe to a company for goods or services that have been delivered but not yet paid for. Accounts receivable is considered an asset on a company's balance sheet, as it represents money that is expected to be received in the future.

In the context of business transactions, when a company sells products or services on credit, it creates an account receivable. This is crucial for managing cash flow, as it reflects expected income that can influence budgeting and financial planning.

Understanding accounts receivable is essential for assessing a company's liquidity and financial health, as it provides insight into how efficiently the business is collecting payments from its customers.