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In this tutorial, we discuss the cash receipts journal, which records all cash inflows for a business. The process begins with entering the date of the transaction. For example, when customer John Henry pays $500 towards his account, the individual accounts receivable account for John Henry is credited. The invoice number associated with the payment is also noted if available. John receives a 10% discount, totaling $50, which is recorded in the sales discount column. Consequently, $450 is entered in the cash debit column, while the full invoice amount is reflected in the accounts receivable credit column. This process helps manage cash transactions effectively.
