The journal entry to record the receipt of cash from credit clients would include:

Question

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When a business receives cash from credit clients, it means that the clients are paying off their previously recognized debts. Therefore, the business needs to record an increase in its cash balance (debit to Cash) and a decrease in the balance of Accounts Receivable (credit to Accounts Receivable) to reflect the payment received. This entry does not directly affect income accounts at the time of cash receipt because the revenue was recognized at the time of the initial credit sale.

The Journal Entry to Record the Receipt of Cash from Credit