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The proper journal entry would involve an invoice.

What is an invoice?

  • A commercial document known by the names invoice, bill, or tab is one that a seller issues to a buyer in connection with a sale transaction.
  • Typically, an invoice will include payment terms. In addition to offering a discount if paid in full before the due date, these documents may provide that the buyer has a maximum number of days to make payment.
  • The items or services specified on the invoice may have already been paid for by the buyer. Some sellers clearly indicate in huge, capital letters on an invoice if it has already been paid in order to eliminate ambiguity and the ensuing needless contacts from buyers to sellers.

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