Payment on account

A payment on account occurs when a payment is received from a customer, and there is no notation with the payment regarding which invoice is being paid. The seller records the payment in a pending account, while depositing the check.  The contents of the pending account are later investigated and cleared as more information is obtained from customers. A payment on account can also refer to an advance payment, which the recipient then applies to subsequent invoices as they are generated.

Related Courses

Bookkeeping Guidebook 
New Controller Guidebook