What account posting rules are applied to customer invoices?

When posting customer invoices, the standard accounting treatment recognizes an increase in assets and revenue. In this context, the correct account posting involves debiting the Receivables account, which reflects the amount that customers owe to the company, thus increasing the company's assets. Simultaneously, the Revenue account is credited, acknowledging the income generated from the sale of goods or services.

The retention of earnings in the model does not apply directly to customer invoices and is rather a factor of period-end closings, reflecting how profits are retained or distributed. Therefore, the combination of debiting Receivables and crediting Revenue accurately reflects the financial transaction involved when generating an invoice for a customer. This aligns with the fundamental principles of double-entry accounting, where each transaction must reflect corresponding changes in different accounts to maintain the balance.