What does a journal entry look like when cash is received?



Q8. Cash receipt
What does a journal entry look like when cash is received?

A8. An increase in cash is recorded on the debit side of a journal entry.
(1) Entity A sold 300 units of merchandise at $8 per unit and received $2,400 in cash.

Journal entry:

  Debit Credit
Cash 2,400  
     Sales revenue   2,400

[Note]
1. Increase in cash (asset): debit
2. Increase in sales (revenue): credit

(2) Entity B borrowed $61,000 from a bank and received the full amount in cash.

Journal entry:

  Debit Credit
Cash 61,000  
     Borrowings   61,000

[Note]
1. Increase in cash (asset): debit
2. Increase in borrowings (liability): credit

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