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.

Popular Examples

Another example for you to discover.

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

You May Also Like

Related pages

compounding continuously equationaccounting treatment of sale of fixed assetscalculate annuity duehow to calculate present value of an annuitydepreciation in trial balancecalculate cost of goods manufacturedcalculating debtor dayscalculation for inventory turnoverbasics of book keepingpayback period formula for uneven cash flowbookkeeping suppliesprepaid expense account typenon interest bearing note payablethe term receivables includes alldebit credit entriesamortisation costcontribution margin format income statementfreight collect fobperpetuities formuladeferred tax calculation worksheetsample accounting excel spreadsheetcash book with cash and bank columnsliquidating distribution partnershipchart of accounts templatescomplicated accounting journal entriesdepreciation calculator excelliquidating distribution partnershipcommon size balance sheet ratiosrecourse factoring definitionis depreciation an accrued expensepetty cash receipt template freeshrinkage in accountingjournal entry for accounts payablegrowing perpetuity formulaprice variance calculatormeaning of payback periodpetty cash report templatecalculating reorder pointdividend statement templatedeferrals and accrualsdisposal of fixed assets double entrynumber of days sales in receivables formulaentries for bad debtscapitalized leasecash receipts journal templatefv formula excelsimple interest and compound interest formulasaged creditorsbasic accounting concepts and principlesfactoring of trade receivablesformula rearranger calculatordouble entry for petty cashwarranty journal entrywhat is subsidiary ledgercost volume profit formulahow to journalize freight chargesfinancial accounting debits and creditsunearned service revenue still unearned journal entryhow to calculate markup percentageaccounting credits and debitsaccounting methods cash vs accrualsmall business bookkeeping formsdebit accounts receivablemonthly debtor days calculation formulaerrors that affect the trial balanceaccounting concepts quizamortization table accountingcalculation of gross profit ratiolifo reserve definitionsuspense account is which type of accountwhat is the periodicity assumptionsample balance sheet reconciliation templatehow to calculate double declining depreciation ratereversing entries examplefuture value of annuitywhat is npv in accountingwhat is an accounting equationmid year convention formula