1. Section 2: Cash Receipts Journal
Accounting II
Ms. Alltucker

2. Learning Objectives What you will learn: Why it’s important:
How to record transactions in the cash receipts journal
How to post from the cash receipts journal to accounts receivable subsidiary ledger accounts
How to post amounts in the general credit columns of cash receipts journal to general ledger accounts
How to post column totals
How to prepare a schedule of accounts receivable
Why it’s important:
Use of cash receipts journal will save time and reduce errors

3. Cash Receipts Journal Cash receipts
Payments made from charge customers
Cash sales
Bank card sales
Sale of other business assets

4. Cash Receipts Journal
Special journal used to record all cash receipt transactions
Every transaction recorded in cash receipts journal REQUIRES a debit to cash in bank
Cash in bank debit column
Contains six amount columns

5. Cash Receipts Journal

6. Recording Cash from Charge Customers
Business Transaction
On December 5, On
Your Mark received $212
from Casey Klein to
apply on account,
Receipt 301.
JOURNAL ENTRY

7. Recording Cash Received on Account, Less a Cash Discount
Business Transaction
On December 12, On
Your Mark received $1,470
from South Branch High
School Athletics in pay-
ment of Sales Slip 51 for
$1,500 less the discount of $30, Receipt 302.
JOURNAL ENTRY

8. Recording Cash Sales On December 15, On Your
Business Transaction
On December 15, On Your
Mark records the cash sales
for the first two weeks of
December, $3,000, and $180
in related sales taxes,
Tape 55.
JOURNAL ENTRY

9. Posting to the Accounts Receivable Subsidiary Ledger
Daily postings are made from the Accounts Receivable Credit column to the accounts receivable subsidiary ledger
Ensures that customer accounts are always present

10. Posting to the Accounts Receivable Subsidiary Ledger
1. Enter the date of the transaction in the ledger account
2. Enter the post reference CR—cash receipts
Example: CR12
3. enter the amount shown in the acct/rec credit column of the cash receipts journal
4. Compute new balance
5. Enter a check mark in the post reference column in cash receipts journal

11. Posting to the Accounts Receivable Subsidiary Ledger

12. Posting the General Credit Column
1. Enter the date of the transaction
2. Enter the journal letter and page number
3. Enter amount from general column
4. compute new balance
5. Return to cash receipts journal and enter the general ledger account number in post reference

13. Posting the General Credit Column

14. Footing, Totaling, Proving and Ruling the CR Journal
1. Draw a single line across the six columns, below the last transaction
2. foot the columns
3. Test for the equality of debits and credits
4. Enter date of last transaction
5. Write “Totals”
6. Enter the column totals in pen
7. Double rule the amount columns
** column totals are then posted to the general ledger

15. Posting Column totals to the General Ledger
There are six amount columns in a CR journal
ONLY 5 COLUMN TOTALS ARE POSTED
Total of the general credit column is NOT posted
Entries have already been posted, individually, to the general ledger accounts

16. Posting Column totals to the General Ledger
1. Place a check mark in parenthesis under the General column total—this total is not posted
2. Post the sales total to the sales account credit column
3. post the sales tax payable
4. Post the accounts receivable total
5. post the Sales discount total
6. Post the cash in bank total
7. Compute new balances for each
8. Write the account number of each account below the double line
LOOK ON PAGE 437 FOR AN EXAMPLE

17. Proving the Acct/Rec. Subsidiary Ledger
At the end of the month you have to prove that the Accounts Receivable (controlling account) total EQUALS the total of all subsidiary account
Schedule of Accounts Receivable report listing each charge customer, the balance in the customer’s account, and the total amount due from all customers
May be prepared on plain paper

18. Schedule of Accounts Receivable

19. Errors in the Subsidiary Ledger
Proving accounts receivable
Internal control procedure that often uncovers certain types of errors
Detects a failure to post a transaction
Detects a failure in computing new balances
DOES NOT provide assurance that transactions were posted to the correct customer account within the subsidiary ledger
These types of errors are often detected when a customer finds an error in their monthly billing