Accounts receivable (also known as trade receivables) represent amounts owed to a company by its customers for goods or services sold on credit. Here are the typical journal entries for accounts receivable:
When recording a sale on credit:
- Debit the accounts receivable account.
- Credit the sales or revenue account.
Example:
Date Particulars Debit (₹) Credit (₹) ------------------------------------------------------------------------ 2024-06-06 Accounts Receivable A/c 50,000 To Sales A/c 50,000 (Being goods sold on credit)When receiving payment from the customer:
- Debit the bank or cash account.
- Credit the accounts receivable account.
Example:
Date Particulars Debit (₹) Credit (₹) ------------------------------------------------------------------------ 2024-06-15 Bank A/c 50,000 To Accounts Receivable A/c 50,000 (Being payment received from customer)When granting a discount or allowance to the customer:
- Debit the sales discount or allowance account.
- Credit the accounts receivable account.
Example (assuming a discount given):
Date Particulars Debit (₹) Credit (₹) ------------------------------------------------------------------------ 2024-06-20 Sales Discount A/c 1,000 Bank A/c 49,000 To Accounts Receivable A/c 50,000 (Being payment received from customer with discount)For GST Output Tax (if applicable):
- Debit the accounts receivable account.
- Credit the sales account and GST Output Tax account.
Example:
Date Particulars Debit (₹) Credit (₹) ------------------------------------------------------------------------ 2024-06-06 Accounts Receivable A/c 50,000 To Sales A/c 45,000 To GST Output Tax A/c 5,000 (Being goods sold on credit including GST)
These entries ensure that the company accurately records its receivables, maintains proper tracking of amounts due from customers, and complies with accounting standards and tax regulations.
