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In this video tutorial, the cash receipts journal is explained as a tool to manage all cash inflows for a business. The video presents an example involving a customer, John Henry, who pays $500 of his accounts receivable. The first step is to record the date and credit the individual accounts receivable account for John Henry. An explanation and invoice number, if known, are noted. In this case, a 10% discount of $50 is given, which is recorded in the sales discount column. The cash debit column reflects $450, while the accounts receivable credit column shows the full payment amount of $500. This process illustrates how to accurately post transactions in the cash receipts journal.