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

bookkeeping on excelreducing balance method calculatorzero coupon bond priceinvoice ledgerpetty cash accounting templatevariable overhead efficiency variance formulawhat is verifiability in accountingfreight prepaid meansadjusting entry unearned revenueinterest rate excel formulaarr calculatorformat for petty cash book in excelcredit sales accounting entryoverapplied overheadmargin vs markup chartfuture value annuity table pdfunearned revenue journal entry examplesexamples of manufacturing overheadreceivable conversion periodthe rule of 78scost of goods manufactured templatehow to prepare a statement of retained earningscash flow statement analysis examplepresent value of a single sum calculatoraccounts receivable and unearned revenuewhat is credit sales on balance sheethow to calculate common size income statementchart of accounts numberingexamples of transactional analysisaccounts payable debit or creditcredits and debits in accountingcogs formula manufacturingaccounting quizzesmarkup v margin calculatorexcel internal rate of returnaccelerated depreciation method exampleaccounting accrual vs cashcogs margin formulaaccounting quizzes with answersan accounts receivable ledger ishow to calculate future value of an annuityan overstatement of beginning inventory results inpresent value of annuity formula in excelnet account receivable formulanotes receivable assetaccounting cvphow to find the contribution marginbook scrappingassets turnover ratio formulapresent value of stock with dividend calculatorhow to calculate margins and markupscalculate payback period calculatorcalculation of capital employed formulatrade payables definitionexcel function pmtimprest meanshow to calculate cumulative interest formulavariable cost per unit formuladifference between imprest and petty cashformula for quick ratio in accountingformula for loan payment exceladjusting journal entry for bad debt expensethe number of days sales in receivablesintangibles accountingexamples of receivableshow to calculate markuppmt dividendaccrued expenses journal entry exampleprepaid expense journal entryhow to calculate the total variable costtransactional analysis simple explanationunadjusted and adjusted trial balanceexcel formula for gross marginmoney ledger templateinterest rate calculation in excel