Cash receipts journal is a book used to record all transactions involving receipt of cash. Examples are cash sales, receipt of interest and dividend revenue, collections from customer accounts and cash sale of assets. Typically there are separate columns for the date, explanation, cash debit, sales discount debit, other debit, account credit, accounts receivable credit and other credit.
Basically, all transactions involving the receipt of cash will be recorded in the cash receipts journal. The use of the debit columns for cash and sales discounts are self-explanatory. The debit column for other accounts may be used when cash is received in combination with some other asset.
The credit column for accounts receivable is used to record credits to customers’ accounts as receivables are collected. The credit column for sales is used to accumulate cash sales during the month so that the total can be posted to the sales account. The credit column for other accounts may be used when a transaction may require credits to two different accounts.
At the end of the month, the journal columns for cash, sales discounts, accounts receivable, and sales are totaled and posted to the proper general ledger accounts. Completion of these entries is indicated by placing the corresponding general ledger account number below the column total. The totals of the other accounts columns are not posted since the individual items have already been posted. An X is placed below these columns to show that no posting is necessary. For accounting service and bookkeeping service, please call us at 6817 4500.