What can cash received be categorized as?

Cash received can be categorized primarily as sales or payment against previous invoices because these transactions represent the primary revenue-generating activities of a business. When a business sells goods or services, the cash received is a direct result of those sales. This income is essential for maintaining cash flow and is usually recorded in the sales revenue account.

Payments against previous invoices also fall under this category because when a customer pays their outstanding balances, this transaction is merely settling accounts for sales that have already occurred. It reflects the effective collection of revenue that has been recognized in the past accounting periods.

The other options, while valid forms of cash received, represent more specific situations that do not encompass the broader category of cash inflow from core business sales activities.