Received Cash From Customers On Account Increase Or Decrease

Cash / Check Collected From Customers On Account / Credit Increase Decrease

Received cash from customers or clients on account increases Cash Account and decreases Accounts Receivable as we collect cash from customers to whom we sold merchandise / goods or rendered services on account / credit.

The journal entry for cash collection is shown below:

Collections From Customers / Clients On Account Journal Entry

                                                                              Cash a/c  XXX

 

                                                                                                               Accounts Receivable a/c  XXX

 

                                                              (Cash Received From Customer On Account)

A customer may also sent us cheque / check for the goods sold or services performed on account. In that case, bank account is debited and accounts receivable account / sundry debtors account is credited.