Summary
Highlights
The cash receipts journal is a record of all cash received by an entity, whether through direct deposits or electronic transfers. It's crucial to only record actual cash received, not cash owed or cash paid out by the business.
The journal format includes columns for document number, day, details (who provided the cash), folio (cross-reference), analysis of receipts (all daily cash received), bank (total daily deposits), sales (for cash sales), and sundry accounts (for all other cash receipts). The sundry account column requires a detailed description of the transaction.
An owner investing R30,000 into the business (receipt 010, day 1) is recorded. The amount goes into analysis of receipts and bank columns. Since it's not a sale, it's categorized under 'Sundry Account' as 'Capital'.
A payment for rent by check is not recorded in the cash receipts journal as it's an outflow of cash, not an inflow. This would be recorded in a cash payments journal.
Receiving R1,500 rent from a tenant (receipt 011, day 6) is recorded. It's entered in analysis of receipts and bank, then categorized as 'Rent Income' under 'Sundry Account'.
Selling inventory for R12,000 cash (receipt 012, day 14) is recorded under analysis of receipts, bank, and directly under the 'Sales' column, as there is a dedicated column for sales.
Borrowing R15,000 from Müller Bank (receipt 013, day 21) is recorded as cash received. The amount is entered in analysis of receipts and bank, and categorized as 'Müller Bank Loan' under 'Sundry Account'.
After all transactions are recorded, the final step involves totaling each column. The total in the 'Analysis of Receipts' column must always match the total in the 'Bank' column, serving as a balance check.