Cash Receipts Journal

Special Journals

In a typical 2-column manual accounting system, transactions are entered as debits to one (or more) account and balancing credits to one (or more) account. If you consider some recurring transactions (such as sales) that will hopefully occur many times during an accounting cycle, all this double entry can add up to a lot of work. That's where special journals come into play.

Special journals are designed as a simple way to record a single type of frequently occurring transaction. The types of special journals depends on the nature of the business, but a few types are frequently seen in businesses that rely on manual accounting procedures:

Cash Receipts Journal

The Cash Receipts Journal is used to record sales of merchandise for cash. (Credit sales are not recorded here, they belong in the sales journal.)

All transactions in the cash receipts journal involve the receipt of cash, so you'll find a column for debiting cash (Cash DR.). There is also a debit column for sales discounts in case the transaction involves a sale that is discounted.

To balance these debits, you'll find three credit columns. Sales and Accounts Receivable are the two accounts that will mostly be involved in these transactions (besides cash, of course). The column for Other Accounts is for all other types of cash-receiving transactions that don't involve sales or accounts receivable.

See the columns available in the Cash Receipts Journal in Figure A below. (To see Figure A, click the A button in the flash program at the bottom of this page. This is where you'll find all the figures for this tutorial.)

Cash Receipts Journal Examples

Consider the following four examples for your cash receipts journal:

  • Customer A sends a check for a prior sale, paying $10,357.55 and taking a $102.55 sales discount;
  • You make a cash sale for $452;
  • Customer B sends a check for a prior sale, paying $6,120;
  • You are paid $3,000 in principal and $155 in interest on a note.

These transactions are posted to the cash receipts journal as shown in Figure A below.

Posting from the Cash Receipts Journal

The column values are posted in their own separate ways: 

  • Transactions from the Other Accounts column should be posted individually in the general ledger, as shown in Figure B below. (The account number for the general ledger account is placed in the posting column of the Cash Receipts Journal.)
  • Cash Sales recorded in the Cash Receipts Journal should be posted as a single Sales credit total in your general ledger, as shown in Figure C below.
  • Like cash sales, sales discounts should be posted as a single Sales Discounts credit total in your general ledger, as shown in Figure C below.
  • Cash should be posted as a single debit total in your general ledger, as shown in Figure D below.
  • When you record cash payments towards accounts receivables, you should post individual transactions as credits to the customer accounts in the accounts receivable ledger, as shown in Figure E below.

 

Cash Receipts Journal Illustrations

The Cash Receipts Journal is a special journal designed to record a single type of frequently occurring transaction — in this case, cash receipts. This tutorial will cover the concept of the cash receipts journal from the original transactions through the posting process.

61 thoughts on “Cash Receipts Journal

  1. Shouldn’t the Jan 31st Interest Income recognition transaction be recorded as a debit to the Cash account in figure A of the Cash Receipts Journal Illustration? The crossfootings are out of balance.

  2. @michelle
    Yes, you would record the amount of the receipt in the Sales Credit column, and then the Sales Discount in the Sales Debit column, with the amount of the sale – the discount in the Cash in Bank Debit Section.

    correct me if im wrong, im only 15
    but been in an accounting class for 2 years now

  3. The total amount of Cash for the receipt of the payment of the Notes Receivable with the corresponding amount of interest should include the amount of interest. Or else, the amounts of DEBIT and CREDIT is not balance.

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  6. Hi there,
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  28. Hi,

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  29. Firstly, this blog is amazing, i am currently trying to do my businesses’ books i have the Statement of account with the trust bank of Brisbane and i am trying to frill in the cash receipts journal and the Cash payments journal could anyone give me a hand. i saw this blog and there are so many great pieces of information here and i thought one of you with a broader knowledge base might be able to help.
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