Journal Entries of Account Receivables

Account receivables are the major current asset if you sell you goods on credit. When we sell our goods on credit, we make the party account of buyer. When we calculate the receivable  total from  all these parties, it will be account receivables. In simple words, "Account used to record sales made "on account", meaning that the company has made a sale but has not collected payment.

Following are main journal entries of account receivables.

1. When we sell goods on credit 

Account Receivables or Debtor Account Debit

Sales Account Credit 

2. When we receive money from Account Receivables 

Bank Account Debit 

Account Receivables or Debtor Account Credit 

3. When account receivables are converted into bill receivables 

Bill receivable account Debit 

Account Receivables or Debtor  account Credit 

4. When some of customers become bad and these account will be written off with following journal entry.

Bad Debt Account Debit 

Account Receivable Account Credit 

5. When a customer becomes good and gives his previous debt which was written off through bad, it means it is just recovery of bad debt.

Bank Account Debit 

Bad Debts Recovered from Particular Debtor Account  (Specific name of client) Credit 

6. When you sell goods on the basis of credit card 

It means, you accept money through customer's credit card. 

Let me explain with a simple example.

Reliance mobile company's online site accepts credit cards. Through credit card, company  recharged Rs. 1,00,000. The credit card company charges 5%. Following will be it journal entry

a) When reliance company get cash immediately from bank after submitting sales invoice 

Cash Account Debit  100,000

Credit Card Charges Debit 5,000

Sales Account Credit 105,000

b) When reliance company has to wait after submitting sales invoice to bank 

1. The entry on the date of sale.

Account Receivable Account Debit  105,000

Sales Account Credit                 105,000

2. The entry on the date that reliance company  receives the cash. 

Cash Account Debit       1,00,000

Credit Card Charges Account Debit  5,000

Account Receivables Account Credit  1,05,000