Received Cash on Account Journal Entry

A received cash on account journal entry is needed when a business has received cash from a customer and the amount is not allocated to a particular customer invoice or the customer has not yet been invoiced.

For example, suppose a business provides design services and has received cash of £4,000 from a customer. The cash receipt needs to be credited to the customers accounts receivable account.

The received cash on account journal entry will be as follows.

Received Cash on Account Journal Entry

The accounting records will show the following bookkeeping entries for the cash received on account from the customer:

Received Cash on Account Journal Entry
Account Debit Credit
Cash 4,000
Accounts receivable 4,000
Total 4,000 4,000

Received Cash on Account Bookkeeping Explained


Cash has been received by the business and needs to be debited to the asset account of cash.


The amount is credited to the accounts receivable account of the customer to record the fact that the cash has been received from them. It will later be allocated to an invoice posted on the account of the customer.

Accounting Equation for Received Cash on Account Journal Entry

The accounting equation, Assets = Liabilities + Owners Equity means that the total assets of the business are always equal to the total liabilities of the business This is true at any time and applies to each transaction. For this transaction the accounting equation is shown in the following table.

Received Cash on Account Journal Entry Accounting Equation
Assets = Liabilities + Owners Equity
Cash + Accounts receivable = None + None
4,000 – 4,000 = 0 + 0

In this case one asset cash increases as the cash is received by the business and another asset (accounts receivable) decreases representing money received from the customer to be allocated against customer invoices at a later date.

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Received Cash on Account Journal Entry November 6th, 2016Team

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