Cash received from sales is recorded as which entry?

• A. Debit Revenue; Credit Cash
• B. Debit Cash; Credit Sales
• C. Debit Accounts Receivable; Credit Revenue
• D. Debit Cash; Credit Accounts Receivable

Answer: (B)

When cash is received from a sale, you must reflect both the cash inflow and the revenue earned. In double-entry accounting, cash is an asset and is increased with a debit, while revenue is increased with a credit. Therefore, the correct journal entry is Debit Cash; Credit Sales (or Credit Revenue).

This shows the cash received and the revenue recognized from the sale. The other forms don’t fit: debiting Revenue would wrongly increase a revenue account negatively, while crediting Cash would reduce cash. Debit to Accounts Receivable with a credit to Revenue applies to a sale on credit, not a cash sale, and Debit Cash with a credit to Accounts Receivable records collecting money from a prior receivable, not the initial sale itself.