What is the result in the general ledger when a customer payment is processed?

When a customer payment is processed, the correct outcome in the general ledger is to debit Undeposited Funds and credit Accounts Receivable (A/R). This reflects the transaction accurately by recognizing that the cash payment from the customer is not yet deposited into the bank, hence it is recorded in the Undeposited Funds account. This ensures that there is an accurate representation of the company's cash position until the actual deposit to the bank occurs.

At the same time, crediting A/R indicates that the amount owed by the customer has been settled, effectively reducing the customer’s outstanding balance in the Accounts Receivable account. This dual entry is crucial for maintaining the integrity of the accounting records, ensuring that cash flow is appropriately tracked, and that revenue recognition aligns with the payment received.

This process is fundamental in accounting practices to ensure transparency and accurate financial reporting.