Question

Mention what is the difference between the "residual payment" and "partial payment" methods of allocating cash in account receivable? 

Answer 1

The main difference between the residual and partial payment includes: 

• Residual Payment: While in residual payment, invoice A456 is cleared for the full value $100 and a new invoice line item is produced for the remaining balance of $30. 
• Partial payment: For example, let say invoice A456 exits for $100, and the customer pays $70. With the partial payment, it offsets the invoice leaving a remaining balance $30