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In this video tutorial, we discuss the cash receipts journal, which manages all cash inflows into a business. The tutorial includes an example involving John Henry, a regular customer who pays $500 toward his account receivable. The first step in the journal is to record the date, followed by crediting the individual accounts receivable account for John Henry. An explanation of the payment, such as the invoice number, is noted. Since John is a valued customer, he receives a 10% discount of $50, which is recorded in the sales discount column. The cash debit column shows $450, while the accounts receivable credit column reflects the full purchase amount.
