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