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Home Is Accounts Receivable a Debit or Credit?
23 Mar 2022 By PAYCEC
The golden rule in accounting is that debit means assets (something you own or are due to own) and credit means liabilities (something you owe).
On a balance sheet, accounts receivable is always recorded as an asset, hence a debit, because it’s money due to you soon that you’ll own and benefit from when it arrives. Accounts receivable is also listed as one of the first, or current, assets on your balance sheet since payment is expected in the short-term (ex: in one year or less).
On a trial balance, accounts receivable is a debit until the customer pays. Once the customer has paid, you’ll credit accounts receivable and debit your cash account, since the money is now in your bank and no longer owed to you. The ending balance of accounts receivable on your trial balance is usually a debit.
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