Accounts Receivable Credit

Last Updated: Jun 6, 2019

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Created On : Jun 6, 2019

When a borrower makes a sale, other than for cash, Accounts Receivable is debited. In simplest terms an Account Receivable Credit is an entry on the books that is needed to remove the Accounts Receivable. This may be either because the account has been paid, or may be for other reasons to reflect that the AR will not be collected. Examples of non cash credits to Accounts Receivable could include a credit for returns, allowances and discounts taken for early payment, or could include accounting recognition that the account should be written off as a bad debt.