All 23 Cash Application questions
More in Cash Application
What is cash application in accounts receivable? What is unapplied (or unidentified) cash? What is remittance advice from the customer's side and why is it important for cash application? What is the difference between a payment and a receipt in AR? What does it mean to post a receipt 'on account'? What happens to the AR balance when a receipt is applied? How does automated cash application (auto-matching) work? How do you handle a short payment or overpayment during cash application? What are customer deductions (chargebacks) and how are they managed? What is a lockbox and how does it help cash application?
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Accounts Payable & Receivable › Cash Application

What is the journal entry to record a customer payment received?

Beginner

Answer

Receiving a customer payment debits cash/bank and credits accounts receivable, clearing the specific open invoices. This reverses the original sale-on-credit entry (which debited AR and credited revenue). No revenue is recognized again—only the receivable is converted to cash.
Customer pays $5,000 for invoice #A100:
  Dr Bank                5,000
      Cr Accounts Receivable    5,000
Real-world example A $5,000 receipt clears invoice #A100 by debiting bank and crediting AR, leaving revenue untouched.

Common follow-ups: Why isn't revenue credited on receipt? | What was the original sale entry?

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All 23 Cash Application questions