There's a practice question: Business sells goods on credit to Q Ltd for £600. I'm pretty certain that the answer here is, because of the matching principle, that assets would increase +£600 and Income would increase +£600 to balance the books. Even though the money has not been received.
What about when the company Q pays off £450 of its outstanding amount to the business? Which accounts would increase?
Suggestion:
You're correct on the first part: The entry would be:
Debit 'Accounts Receivable – Q Ltd.' £600 [increase an asset account]
Credit 'Sales' £600 [increase an income account]
When partial payment is received, the entry is:
Debit 'Cash' £450 [increase an asset account]
Credit 'Accounts Receivable – Q Ltd.' £450 [decrease an asset account]
