JE-12 Mar 2026Manualposted
Receive the deposit with the order.
| Account | Dimensions | Debit | Credit |
|---|---|---|---|
| 1000 Cash | 3,000 US Dollar | ||
| 2410 Customer deposits | 3,000 US Dollar | ||
| Totals | 3,000 US Dollar | 3,000 US Dollar | |
Balanced.
Journal entry for a customer deposit
When a customer pays a deposit, debit Cash and credit Customer deposits. On delivery, debit Customer deposits for the deposit, debit Accounts receivable for the balance, and credit Revenue for the full price.
- Order value
- $10,000
- Deposit (30%)
- $3,000
- Billed on delivery
- $7,000
- Entity
- Illustrative company
- Basis
- Accrual
- Currency
- USD
- Period
- March – April 2026
The worked example
A customer orders custom fixtures for $10,000 and pays a 30% deposit of $3,000 with the order. The fixtures ship a month later and the remaining $7,000 is invoiced then.
Transaction · March 2, 2026
Transaction · April 6, 2026
JE-26 Apr 2026Manualposted
Deliver the order and invoice the balance.
Journal entry JE-2, 3 lines Account Dimensions Debit Credit 2410 Customer deposits 3,000 US Dollar 1100 Accounts receivable 7,000 US Dollar 4000 Revenue 10,000 US Dollar Totals 10,000 US Dollar 10,000 US Dollar Balanced.
Transaction · May 4, 2026
JE-34 May 2026Manualposted
Collect the balance.
Journal entry JE-3, 2 lines Account Dimensions Debit Credit 1000 Cash 7,000 US Dollar 1100 Accounts receivable 7,000 US Dollar Totals 7,000 US Dollar 7,000 US Dollar Balanced.
What the entries do to the accounts
Every entry above posted to the ledger, starting from zero balances: the net debit or credit each account is left with. Debits equal credits, so the books still balance.
| Account | Debit | Credit |
|---|---|---|
| 1000 Cash | 10,000 US Dollar | |
| 4000 Revenue | 10,000 US Dollar | |
| Totals | 10,000 US Dollar | 10,000 US Dollar |
2 accounts net to zero across the entries and are not shown.
Why it is booked this way
Cash received before delivery is an obligation: the company owes the customer either the goods or the money back. It sits as a liability until the goods ship.
On delivery the whole price becomes revenue. The deposit already paid settles part of it, and only the remainder is a receivable — which is why the delivery entry has two debits.
Common mistakes
- Crediting revenue when the deposit arrives.
- Invoicing the full price on delivery and forgetting to apply the deposit, so the customer appears to owe the whole amount.
Questions
- Is a customer deposit revenue?
- No. A deposit is cash taken for goods or services not yet delivered, so it is a liability until delivery. Booking it as revenue recognizes a sale that has not happened, and would have to be reversed if the order were cancelled.
- What is the difference between a customer deposit and deferred revenue?
- Functionally yes: both are cash received before performance. Companies often keep a separate deposits account for one-off orders and use deferred revenue for subscriptions, so each can be reconciled to its own source.
Terms on this page
Work with this entry
The tool that computes the schedule, the concept behind it, the entries that come next and the components that render them.
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- Journal entry for accrued revenueAt month-end, debit Unbilled receivables and credit Revenue for work delivered but not yet invoiced. When the invoice goes out, debit Accounts receivable and credit Unbilled receivables.Entry
- CashApplicationThe highest-value screen in AR. Every case, not just the happy one.Component
- JournalEntryDebit and credit as two columns. No signed-column variant.Component
An illustrative company, not anyone’s real books. Every figure on this page is computed from the inputs in the example and posted by the same functions as the journal entry balancer. General information for US companies under US GAAP, not accounting or tax advice.