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accounting

Accounts Receivable & Payable - should payed ones be there or not?


I am working on accounting application and have one dilemma on how to treat Account Payable & Receivable with respect to them actualy been or not payed.

For example, Company A sells Product B to Customer X. They issue an invoice, send to Customer X and at that point of time, the transaction is shown on Account Receivable with notion its for Customer X and other info (date, etc...).

The question is, what happens when Customer X actually pays for it? Should that transaction still be visible in Account Receivable or removed from it?

I am interested in it from accounting point of view.


Solution

  • Once a payment is applied on this invoice, Accounts Receivable should be credited and its balance for this customer should be 0