What is the correct method to record a payment received against an existing invoice?

What is the correct method to record a payment received against an existing invoice?

• A. Create a Credit Memo.
• B. Record a Journal Entry.
• C. Receive Payment.
• D. Issue a Refund.

Answer: (C)

When a customer pays you on an open invoice, use the Receive Payment routine. This workflow ties the cash received to the outstanding invoice, reducing the customer’s Accounts Receivable balance and increasing cash or undeposited funds, and it lets you apply the payment to one or more invoices as needed. A credit memo is used to issue a credit to the customer, not to record a new payment against an existing invoice. A journal entry bypasses the standard customer-payment flow and can complicate reconciliations. A refund would send money back to the customer, not record the payment you received. So the correct method is Receive Payment.

When a customer pays you on an open invoice, use the Receive Payment routine. This workflow ties the cash received to the outstanding invoice, reducing the customer’s Accounts Receivable balance and increasing cash or undeposited funds, and it lets you apply the payment to one or more invoices as needed. A credit memo is used to issue a credit to the customer, not to record a new payment against an existing invoice. A journal entry bypasses the standard customer-payment flow and can complicate reconciliations. A refund would send money back to the customer, not record the payment you received. So the correct method is Receive Payment.