In Accounts Receivable, customer incoming payments primarily reduce which account?

In Accounts Receivable, customer incoming payments primarily reduce the Customer receivables account. When a customer makes a payment for an invoice, the amount owed by the customer decreases, leading to a reduction in the total receivables recorded in the accounts. This is a fundamental aspect of the double-entry accounting system, where the increase in cash or bank balance corresponds with a decrease in customer receivables.

A proper understanding of this concept is crucial as it reflects the company's financial health regarding its outstanding invoices. The account that tracks amounts owed by customers is specifically designed for this purpose, making it the most relevant choice in the context of incoming payments from customers.

The other options presented pertain to different accounting functions: for instance, the GR/IR account deals with goods receipt and invoice receipt discrepancies, material stock relates to inventory accounting, and vendor liabilities track amounts owed to suppliers. None of these options directly correlate with the process of recording incoming payments from customers, which is why they are not relevant to this question.