Journal entry for receiving check

Overview

Sometimes, the company may receive a check from its customer for settling the credit purchase that the customer made previously. In this case, the company needs to make the journal entry for receiving check by recognizing it the same as cash received from customers.

In accounting, the check received is recognized as the cash inflow and recorded the stated amount into the cash account. In other words, the company will debit the cash account when it receives the check from customers.

Journal entry for receiving check

The company can make the journal entry for receiving check from the customers for settling of the receivable by debiting the cash account and crediting the accounts receivable.

Account	Debit	Credit
Cash	000
Accounts receivable		000

In this journal entry, there is no impact on the total assets of the balance sheet as one asset (cash) increases, another asset (accounts receivable) decreases in the same amount as a result.

Receiving check example

For example, on July 7, the company ABC receive a $1,000 check from one of its customers for settling the credit purchase that its customer made previously.

In this case, the company ABC can make the journal entry for receiving check of $1,000 by debiting this amount to the cash account and crediting the same amount to the accounts receivable.

Account	Debit	Credit
Cash	1,000
Accounts receivable		1,000

It is useful to note that the check received from the customers and still in the custody of the company should not be recorded in the checking account of the bank balance. Only after the company deposits the check into the bank, should it is recorded in the bank account. Otherwise, the bank reconciliation that the company performs to match the book balance in the company’s record with the bank balance on the bank statement at the end of the period will not balance.