What balance does recording a payment received before creating an invoice typically create?

Recording a payment received before creating an invoice typically results in a positive Accounts Receivable (A/R) balance because it represents money that a customer has paid in advance for goods or services that have not yet been formally billed. This situation is common in scenarios where a business accepts a deposit or prepayment.

In this case, although the business has received payment, it has not yet generated an invoice to document the revenue associated with that payment. This results in the payment being recorded as an asset in the A/R account, indicating that the money is owed to the business financially until the corresponding invoice is issued.

Once the invoice is created, the A/R balance will typically reconcile back to zero, as the amount paid will be applied to the invoice. This reflects the transaction's proper accounting treatment, ensuring that the business accurately tracks its receivables in relation to the services rendered or goods delivered.