A company received $75,000 from a customer "on account." The journal entry would be to:

Name: A company received $75,000 from a customer "on account." The journal entry would be to:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When a company receives money from a customer "on account," it means the customer is paying off a previous amount owed rather than paying for a new transaction with cash. Therefore, the company would debit Cash (to increase the cash account) and credit Accounts receivable (to decrease the amount owed by the customer).

A Company Received $75,000 from a Customer "On Account