Cash Receipts Journal is Updated from Source DocumentsĮach cash receipt is recorded as a line item in the cash receipts journal as shown in the example below. It should be noted that, if the business maintains subsidiary ledger control accounts in the general ledger, then only step 3 above is part of the double entry bookkeeping posting. The cash receipt journal column totals are used to update the general ledger.The cash receipt journal line items are used to update the subsidiary ledgers, such as the accounts receivable ledger.Information is recorded in the cash receipts journal from the appropriate source documents such as bank paying-in books, bank statements and advice slips.The use of the cash receipts journal is a three step process. It is important to understand that if any cash is received, even if it relates only to a part of a larger transaction, then the entire transaction is entered into the cash receipts journal. The cash receipts journal should always have an ‘other’ column to record amounts which do not fit into any of the main categories. Some businesses simply have one column to record the cash amount whereas others need additional columns for accounts receivable receipts, sales discounts, fixed asset sales, new capital, cash sales etc. The cash receipt type columns will depend on the nature of business. Analysis columns – an analysis of the cash receipt into types such as accounts receivable, cash sales, fixed asset sales, other etc.Amount – the total cash receipt amount.Ledger folio – a reference to the subsidiary or general ledger.Description – a description of the transaction indicating the account to be credited.Transaction reference – an internal reference for the transaction.Transaction date – the date the cash is received.The information in the journal is taken from source documents such as remittances, cash receipts vouchers and checks, and typically includes the following: The cash receipts journal format is usually multi-column. Information Listed in the Cash Receipts Journal The cash receipt journal is a book of prime entry and the entries in the journal are not part of the double entry posting. The information recorded in the cash receipts journal is used to make postings to the subsidiary ledgers and to relevant accounts in the general ledger.

In some businesses, the cash receipts journal is combined with the cash disbursements journal and is referred to as the cash book. The journal is simply a chronological listing of all receipts including both cash and checks, and is used to save time, avoid cluttering the general ledger with too much detail, and to allow for segregation of duties. The cash receipts journal is a special journal used to record the receipt of cash by a business.

Cash receipts journal