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What is the journal entry to record when a customer pays their invoice?

If a customer has an unpaid invoice, then that represents an accounts receivable for a customer. When a customer pays on credit, the company would debit accounts receivable and credit revenue (revenue is recognized when earned).

When the customer pays the invoice, say 30 days later, the the company would debit cash and credit accounts receivable. The debit to cash increases the cash account since the company had an inflow of cash. Since the invoice is no longer outstanding, the company removes the invoice from the accounts receivable balance by crediting accounts receivable.

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