All 23 Cash Application questions
More in Cash Application
What is the journal entry to record a customer payment received? 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 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? How are returned/NSF customer payments handled after they were applied?
Advertisement
Accounts Payable & Receivable › Cash Application

What does it mean to post a receipt 'on account'?

Beginner

Answer

Posting on account records a customer receipt against the customer generally, without applying it to specific invoices—used when the invoices to clear aren't yet known. It reduces the customer's overall balance but leaves invoices technically open until later matched, so on-account amounts should be applied promptly.
Real-world example A prepayment is posted on account and later applied to invoices as they're issued.

Common follow-ups: When is on-account posting appropriate? | Why apply on-account amounts promptly?

Aging Analysis Reconciliations Cash Application
All 23 Cash Application questions