How Accounting CS posts cash basis and accrual basis journal entries for accounts receivable

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Our Support department is closed on Friday, April 28th for a company event. However, limited Accounting CS phone support is available on that date from 9 AM - 5 PM ET due to the approaching deadline for quarterly payroll tax forms.

Links to our most popular payroll tax processing topics are available in the Alerts and notices section on the right side of most pages.

If you process receivables for your client in Accounting CS, it is important that you assign the appropriate GL accounts to the AR accounts to ensure that the journal entries are posted to the correct accounts. You must assign these accounts regardless of the accounting method selected (accrual basis or cash basis) in the Setup > Clients > Accounts Receivable tab; otherwise the application will assign items with blank accounts to the undistributed account, which may cause balances to be off.

Accounting CS posts accounts receivable transactions to the accounts listed below. The accounts may differ, based on the accounting method selected for your client.

Accrual basis

Action Debit entries Credit entries Posting period Notes
Entering an invoice Accounts Receivable
Cost of Goods
Sales
Shipping
Sales Tax
Inventory
Posting period for the invoice in the Enter Invoices screen
Creating a finance charge invoice Accounts Receivable Finance Charge Based on the Calculate finance charges through field in the Assess Finance Charges screen
Entering a credit memo Sales
Sales Tax
Inventory
Accounts Receivable
Cost of Goods
Posting period for the credit memo in the Enter Invoices screen
Entering a depositable payment Undeposited Payments Unearned Revenue Posting period for the payment in the Manage Customer Payments screen Depositable payments include cash, checks, and credit cards.
Entering a write-off (payment) Bad Debt Expense Unearned Revenue Posting period for the write-off in the Manage Customer Payments screen This is not a depositable payment.
Applying a payment to an invoice Unearned Revenue Accounts Receivable Based on the AR date
Depositing a payment Cash Undeposited Payments Posting period for the deposit in the Enter Deposits screen

Cash basis

Action Debit entries Credit entries Posting period Notes
Entering an invoice No entry is made.
Creating a finance charge invoice No entry is made.
Entering a credit memo No entry is made. It only reduces the invoice amount.
Entering a depositable payment Undeposited Payments Unearned Revenue Posting period for the payment in the Manage Customer Payments screen Depositable payments include cash, check, and credit cards.
Entering a write off (payment) No entry is made. It only reduces the invoice amount.
Applying a payment to an invoice Unearned revenue
Cost of goods
Sales
Sales Tax
Inventory
Shipping
Finance Charge
Based on the AR date Sales are recorded when the payment is applied to the invoice.
Depositing a payment Cash Undeposited Payments Posting period for the deposit in the Enter Deposits screen

Example: partial payment of an invoice applied proportionally per distribution

The example below illustrates how Accounting CS applies partial payments to each distribution on an invoice.

Example invoice

Invoice item Total of each invoice item Percentage of each item
Item 1 $400.00 40.00%
Item 2 $500.00 50.00%
Item 3 $100.00 10.00%
Invoice total $1,000.00 100.00%

When you apply a partial payment of $500.00, the application applies it as follows.

Invoice item Total of each invoice item Percentage of each item Amount applied
Item 1 $400.00 40.00% $200.00
Item 2 $500.00 50.00% $250.00
Item 3 $100.00 10.00% $50.00
Invoice total $1,000.00 100.00% $500.00

Related topics

Accounts Receivable service, overview

Accounts receivable setup workflow

Accounts receivable process workflow

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