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In this video tutorial, we discuss the cash receipts journal, which manages all cash inflows for a business. The cash receipts journal tracks transactions, such as a payment from regular customer John Henry, who pays $500 towards his accounts receivable. The process starts by entering the transaction date, followed by crediting the individual accounts receivable account for John Henry. An explanation, such as the invoice being paid, is noted. If applicable, the invoice number is recorded. In this instance, John receives a 10% discount, amounting to $50, recorded in the sales discount column. The cash debit column reflects $450, while the accounts receivable credit column shows the full $500 amount.
