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In this video tutorial, we discuss the cash receipts journal, which tracks all cash inflows for a business. The process begins with recording the date and identifying the credited account, such as an individual accounts receivable account for a customer like John Henry, who pays $500. An explanation is added, referencing the invoice being settled. If the invoice number is available, it is noted as well. In this example, John receives a 10% discount of $50, which is recorded in the sales discount column. The cash debit column shows $450, while the full purchase amount is noted in the accounts receivable credit column.
