Basics Updated November 2026

Collecting a receivable

When a customer pays an invoice you recorded earlier, debit Cash and credit Accounts Receivable for the amount received. Revenue is not touched, because it was recognized when the sale was made; the entry simply swaps one asset (the receivable) for another (cash).

Syntax

Dr Cash / Cr Accounts Receivable

Part	What it is
`Cash`	Asset debited for the amount collected.
`Accounts Receivable`	Asset credited to remove the customer's balance.
`Sales Discounts`	Contra-revenue debited when the customer pays within a cash discount period.

Examples

Dr Cash 4,000 / Cr Accounts Receivable 4,000

Result: Total assets unchanged: cash up 4,000, receivables down 4,000

Client pays the 4,000 invoice from last month.

Dr Cash 1,500 / Cr Accounts Receivable 1,500

Result: Receivable from this customer falls from 4,000 to 2,500

Partial payment on account.

Dr Cash 1,960, Dr Sales Discounts 40 / Cr Accounts Receivable 2,000

Result: Assets down 40 net, net sales down 40

Customer pays a 2,000 invoice within the 2/10, n/30 discount period.

Common mistakes

Crediting Sales Revenue when the cash comes in: that records the sale twice; the credit belongs to Accounts Receivable.
Crediting the receivable for the full invoice when the customer paid less: credit only the amount paid plus any discount taken, and leave the balance outstanding.
Debiting Accounts Receivable on collection: receivables are credited when they go down.

Practice Collecting a receivable

These drills check your answer on live data, free, no account needed.

Collecting a receivableNorthwind Consulting billed a client $2,600 for a project completed last month. Today the client pays the invoice in full by check.
Sales discount takenPioneer Supply sold $5,000 of merchandise on account, terms 2/10, n/30, and recorded the sale at the gross amount. The customer pays within the discount period. Record the collection.

Questions

What is the journal entry for cash received from a customer on account?

Debit Cash and credit Accounts Receivable for the amount received.

Is collecting a receivable revenue?

No. The revenue was recorded when the customer was billed. Collection just converts the receivable into cash.

Sale on accountHow to record a sale on credit: debit Accounts Receivable, credit Sales or Service Revenue, plus the cost of goods sold entry and the later collection.
Paying accounts payableHow to record paying a supplier: debit Accounts Payable, credit Cash. Covers partial payments, paying within a discount period and the expense mistake.
Writing off a receivableHow to write off an uncollectible account: Dr Allowance for Doubtful Accounts, Cr Accounts Receivable (allowance method) or Dr Bad Debt Expense (direct).
Credit card salesHow to record a sale paid by card: Dr Cash for the net deposit, Dr Credit Card Expense for the fee, Cr Sales Revenue for the full price. Receivable variant.