If a credit sale of $1,000 is made and cash is collected later, what should the journal entry include?

When a credit sale of $1,000 is made, the initial journal entry records the sale and establishes an accounts receivable, reflecting that the company expects to collect cash in the future. The appropriate entry for the initial sale would typically include a debit to accounts receivable and a credit to sales revenue for $1,000.

Later, when cash is collected from the customer, the journal entry needs to reflect this cash inflow. At this point, you would debit cash for the amount collected, which is $1,000, acknowledging that the company has received the cash. This entry will also include a credit to accounts receivable for the same amount, as the company is fulfilling a previous claim against the customer.

Consequently, the correct action when cash is collected after the credit sale is accounting for it with a debit to cash. Thus, the journal entry accurately reflects the financial activity that has occurred since the sale was recorded.