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In this video, we discuss the cash receipts journal, which tracks all cash inflows for a business. The cash receipts journal example features a transaction involving a regular customer, John Henry, who pays $500 towards his accounts receivable. The process begins by recording the date and noting the credited account, specifically John Henry's accounts receivable. An explanation is added, including the invoice being paid if available. Since John receives a 10% discount of $50, this amount is entered in the sales discount column, while $450 is recorded in the cash debit column. The full purchase amount remains in the accounts receivable credit column.
