Accounts Receivable: debit or credit?
Accounts Receivable increases on the debit side and decreases on the credit side: its normal balance is a debit.
Assets are resources the business controls. They increase with a debit.
Name in each convention
Account names and codes follow each convention; an account that does not exist in a convention is not offered there.
| Convention | Account |
|---|---|
| United States (US textbooks) | Accounts Receivable |
| Spain (PGC 2007) | 430 Clientes |
| France (PCG 2025) | 411 Clients |
| Germany (generic accounts) | Forderungen aus Lieferungen und Leistungen |
Practice entries that use this account
- Sale on account with a trade discount
- Sale on account with cost of goods sold
- Customer returns merchandise bought on account (periodic inventory)
- Collecting a customer’s invoice in full, in cash
- Customer pays within the discount period
- Selling merchandise on account with sales tax
- Invoicing a client for services rendered
- Sale paid partly in cash, partly on account
- Writing off a bad debt: direct write-off method
- Writing off an account under the allowance method
- Selling a machine on account at a gain
- Accruing revenue earned but not yet invoiced
- Correcting a customer payment posted to the wrong account
- Customer check returned NSF
- Customer pays two invoices by one bank transfer, less a bank fee
- Accepting a customer’s note for an open account
- A customer dishonors a note
- Credit sale, return, then payment within the discount period
- Final invoice for a service after a deposit