Cash Receipts Journal
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Designing a Cash Receipts Journal
• Date Column
– Record the date of the cash receipt transaction
• Account Credited or Other Description Column
– If cash is collected on accounts receivable, specify the customer name such as “ABC Inc.”
– If a cash sale, use the description Cash Sale
– If cash is received from entering a loan agreement, specify the account credited as Loan
Payable, use the Other Accounts column
– If cash is received from sale of fully depreciated equipment, specify the account credited as
Gain on Sale of Equipment, use the Other Accounts column
• Posting Reference Column
– √ indicates amount in Accounts Receivable credit column has been posted to the Accounts
Receivable Ledger
– Dash indicates that all amounts will be posted as a column total
– Account number in the Posting Reference column indicates that the transaction in the Other
Accounts column have been individually posted to the applicable account
(continued)
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Designing a Cash Receipts Journal
• Provide separate columns for more frequent transactions, use the Other
Accounts column for less frequent transactions, normally individual columns
would be considered for the following accounts, if applicable
Debit columns
–
–
–
Cash
Sales Discount
Credit Card Expense
Credit columns
–
–
–
Accounts Receivable
Sales
Other Accounts
• Provide a summary of all debits and credits in lower right area of the Cash
Receipts Journal with formulas using the columnar totals, then record the
transactions and continue to check after each one is posted that the difference
between the debits and credits is 0
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M3 CASH RECEIPTS JOURNAL
June 13 Received $350 for old store equipment that had no book value (page 157).
No book value means the store equipment was fully depreciated. This also means that the
Accumulated Depreciation account balance for the Store Equipment is equal to the cost
account (Store Equipment) balance. The following calculation summarizes an
asset that is fully depreciated using illustrative amounts for the Store Equipment and
Accumulated Depreciation accounts since these were not given in the problem.
Store Equipment
Accumulated Depreciation
Net book value
Cash received from sale of store equipment
Gain on sale of store equipment
$ 5,000
5,000
0
350
$ 350
The complete journal entry to record the sale of the old store equipment and the portion of
the entry recorded in the cash receipts journal is in bold:
Cash
Accumulated Depreciation – Store Equipment
Store Equipment
Gain on sale of store equipment
350
5,000
5,000
350
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Example: Cash Receipts Journal
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