Invoicing and accounts receivable
Objective: Record invoices and track customer balances.
Recommended first: Your first journal entries
An invoice records revenue earned and the amount the customer owes. Payment terms such as 'Net 30' state when payment is due. An aging report groups open invoices by how long they are overdue — current, 1–30, 31–60, over 60 days.
Clear invoices get paid faster: include the date of service, a description, the amount, tax if any, and the due date. Aging receivables regularly helps the business follow up early. Revenue is recorded when the work is done, so an invoice raised late still belongs to the period of service.
Check your work
- Does the invoice date match when the work was done?
- Is tax separated from revenue?
- Does the aging report agree with the receivable balance?
Invoice $800 plus 5% fictional sales tax ($40).
| Account | Debit | Credit |
|---|---|---|
| Accounts Receivable | $840.00 | |
| Service Revenue | $800.00 | |
| Sales Tax Payable | $40.00 |
Common mistakes
✗ Including sales tax in revenue.
✓ Tax collected is a liability.
Guided practice
Use hints freely here.
Item 1 of 1
Invoice a client
On Mar 3, 2026, Harbor Point Consulting completes a strategy workshop and sends invoice #INV-114 for $7,100.00, due in 30 days.
- Date
- Mar 3, 2026
- Terms
- Net 30
| Description | Amount |
|---|---|
| Strategy workshop (completed) | $7,100.00 |
| Total | $7,100.00 |
Independent practice
Try these without hints. Completing the lesson needs at least one independent item solved without revealing the answer.
Item 1 of 4
Invoice including sales tax
On Mar 7, 2026, Two Wheels Bike Repair invoices a cycling club $370.00 for fleet servicing plus 5% sales tax (fictional Westmara county rate), payable in 30 days.
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Key terms
- Invoice
- A document requesting payment for goods or services provided.
- Payment terms
- When payment is due and any early-payment discount.
References and provenance
- OpenStax, Principles of Accounting, Volume 1: Financial Accounting (accessed 2026-10-29)
Original lesson written for Bookkeeping Exercises (AI-assisted drafting). Calculations are verified by the platform's automated accounting tests. Not yet reviewed by a credentialed accountant. Updated 2026-10-29.