Question - Mention what is the difference between the “residual payment” and “partial payment” methods of allocating cash in account receivable?
Answer -
The difference between the residual and partial payment includes
Partial payment: For example, let say invoice A456 exits for $100 and customer pay $70. With the partial payment, it offsets the invoice leaving a remaining balance $30
Residual Payment: While in residual payment, invoice A456 is cleared for the full value of $100, and a new invoice line item is produced for the remaining balance of $30.