What needs to be debited when an invoice is created, according to general ledger practices?

When an invoice is created, the process involves recognizing revenue while simultaneously acknowledging that a customer will be expected to pay that amount in the future. This is where the Accounts Receivable account comes into play.

When you create an invoice, you are essentially recording the amount owed by the customer for the goods or services provided. In accounting terms, this means that your Accounts Receivable—an asset account reflecting money owed to the business—needs to be debited. Debiting Accounts Receivable increases this asset, signifying that there is an expectation of cash inflow from the customer.

The other options do not accurately represent the debiting action required at the time of invoice creation. Sales Income, for example, would be credited as part of recognizing the revenue; Inventory Asset would only be affected if the goods sold were recorded at that time; and Cash is not involved until payment is actually received. Thus, the correct entry to make when an invoice is generated is to debit Accounts Receivable.