When a client deposits a retainer of $600 for an invoice of $1,500, where does the outstanding balance post?

When a client deposits a retainer of $600 for an invoice of $1,500, the outstanding balance of $900 will post to Accounts Receivable. This is because Accounts Receivable is used to track amounts owed to the business from clients for services rendered or goods sold on credit.

In this scenario, the client has initially made a part payment with the retainer but still owes the remaining balance of $900. This amount signifies a claim that the business has against the client until the invoice is paid in full. Recording the outstanding balance in Accounts Receivable accurately reflects the business's financial position, showing that it is owed money for the services or products that have yet to be fully paid for.

The other choices reflect accounts or categories that do not accurately represent the situation. Cost of Goods Sold is related to the direct costs attributable to the production of goods sold, which is not relevant in this context. Accounts Payable involves money that the business owes to suppliers or vendors, not what is owed to the business. Retained Earnings is part of equity and reflects cumulative profits or losses, and it is not appropriate for tracking amounts due from clients. Thus, the correct posting for the outstanding balance is indeed in Accounts Receivable.