Double-entry bookkeeping 2: books of prime entry, accounting systems
. Cash received is debited to the bank or cash account.

. Cash received from trade receivables is debited to the trade receivables control account.

. Income increases by the total amount received from cash sales recorded in the cash book.

. Cash received from trade receivables is split into the value of net sales and the liability for VAT.

. Cash received from interest is credited to the interest received (finance income) account.

. Cash received from trade receivables represents an increase in the cash asset and a decrease in the trade receivables asset.

. Debit Cash £144,000, Credit Trade receivables £120,000, Credit VAT £24,000 is the correct double entry to record the receipt of £144,000 from trade receivables.