Cash receivable journal entry is Debit the Cash Receivable Account and Credit the Revenue Account. When a company expects to receive cash in future for a service provided or goods sold, it is records the amount as cash receivable. Cash receivable is an current asset and revenue is a income.
Example: A company provides consulting services worth ₹30,000 to a client, who promises to pay the amount after some days it is called as receivable.
Journal Entry for Cash Receivable
| Date | Account Title | Debit (INR) | Credit (INR) |
|---|---|---|---|
| 10-08-2024 | Cash Receivable | 30,000 | |
| 10-08-2024 | To Consulting Revenue | 30,000 |
Explanation:
- Cash Receivable Account Debit: This entry records the amount the company expects to receive from the client.
- Consulting Revenue Account Credit: This entry records for the revenue earned from providing the consulting services.
When the Cash is Received
When the client pays the ₹30,000, the following entry is made:
Journal Entry:
| Date | Account Title | Debit (INR) | Credit (INR) |
|---|---|---|---|
| 17-08-2024 | Bank/Cash | 30,000 | |
| 17-08-2024 | To Cash Receivable | 30,000 |
Explanation:
- Bank/Cash Account Debit: This entry records for the cash received from the client in future.
- Cash Receivable Account Credit: This entry reduces the receivable balance, indicating the cash has been received.