Table of Contents

Account receivable journal entry

Account receivables?

Accounts receivables are the amounts receivable by the business enterprise against goods sold on credit and services rendered in the normal course of business. Accounts receivables are the sum total of debtors and bills receivable.

Debtor- A debtor is a person or an entity who owes an amount to the business enterprise against credit sales of goods and/or services rendered. For example, Mr.x bought goods on credit from Mr.y for $10,000. Mr.x is a debtor to Mr.y till he pays the value of the goods.
Bills receivable-Bills receivable means a bill of exchange accepted by a debtor, the amount of which will be received on the specified date.

Accounts Receivables are Current assets in the books of the seller because the customer owes him an amount of money to pay against the goods and services already delivered by the seller.
Accounts Receivable appears on the assets side of the balance sheet under the heads of current assets.

Account receivable journal entry

General entry is made for Account Receivable as follows:

Example:

On Jan 1, 2021, X. ltd sold goods on credit to Mr. P. The calculated amount of the invoice, including all taxes, was $50000 to be paid on or before Jan 31, 2021. Mr.P made the full payment of $50000 on Jan 30, 2021. Pass Journal Entry in the books of X.ltd.

On Jan 1, 2021, X. ltd Sold goods on credit to Mr. P. $50000

P’s Account Or Account receivable Account (Assets Account)

Sales Account (Revenue Account)

Assets increase in form of Account receivable

Revenue increase in form of sales