What is the journal entry for received cash?

The receipt of cash is recorded by debiting the cash account to the account from which the cash is received. This source account may be the sales account, account receivable account or any other account from which cash is received.

The journal entry is:

An entity may receive cash in the following events:

• Sales of goods or provision of services
• Payment from account receivables
• Sale of assets.
• Withdrawal of cash from the bank
• Introduction of additional capital in the business
• Subscription or donation received in case of non-profit oriented concerns.
• Other income in cash

This list is not exhaustive. There may be many such events. However, the cash account will be always debited.

Rules of accounting applicable on the cash account

As per the golden rules of accounting, the cash account is a real account as represents an asset. For real accounts, the rule, “Debit the receiver and credit the giver” applies.

Hence, when cash is received, cash is debited and the source (giver) is credited.

As per modern rules of accounting, the cash account is an asset account. Assets accounts are debited when increased and credited when decreased.

Hence, at receipt of cash, cash is debited as cash is increased.