52. Cash Receipts, Cash Payments, and Banking Procedures
Chapter 9
Cash Receipts, Cash Payments, and Banking Procedures
Section 1: Cash Receipts
Section Objectives
The third objective of the chapter is to illustrate how to post from the cash receipts journal to subsidiary and general ledgers.
Record cash receipts in a cash receipts journal.
Account for cash short or over.
Post from the cash receipts journal to subsidiary and general ledgers.
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53. Posting from the Cash Receipts Journal
A business must maintain an adequate cash flow (cash receipts less cash payments).

54. Post from the cash receipts journal to subsidiary and general ledgers.
Objective 3
Post from the cash receipts
journal to subsidiary and
general ledgers.
Posting occurs on a summary basis at the end of the month for all columns except the Other Accounts Credit column. If subsidiary accounts are affected, then they are updated daily.

55. Posting the Column Totals
At the end of the month, the cash receipts journal is totaled and the equality of debits and credits is proved.
Column totals are posted at the end of the month.

56. Debits and credits are equal.
PROOF OF CASH RECEIPTS JOURNAL
Debits
Cash Debit column $42,342.00
Debits and credits are equal.
Credits
Accounts Receivable Credit column $
Sales Tax Payable Credit column ,800.00
Sales Credit column ,500.00
Other Accounts Credit column ,909.00
Total credits $42,342.00
Before posting make sure that total debits and total credits are equal.

57. The column totals are posted to the general ledger.
CASH RECEIPTS JOURNAL PAGE 1
The total of the $2,133 is posted at the end of the month to the Accounts Receivable account in the general ledger. Sales Tax Payable, Sales and Cash column totals are also posted at the end of the month.

58. The amounts in the Other Accounts Credit section are posted.
CASH RECEIPTS JOURNAL PAGE 1
The (X) indicates that the individual amounts are posted, and not the total.
Whenever an entry is made in the Other Accounts Credit column, the transaction must be posted to the General Ledger on the same day so no posting of the column total is necessary at the end of the month.

59. Posting to the Accounts Receivable Ledger
Post entries from the Accounts Receivable Credit column to the customers’ accounts in the accounts receivable subsidiary ledger daily.
Subsidiary ledgers must be updated on a daily basis.

60. On January 7, $ was posted to Roy Anderson’s account in the accounts receivable subsidiary ledger.
Let’s see how the subsidiary ledger is updated for a customer payment.

61. CASH RECEIPTS JOURNAL PAGE 1
SALES
DATE DESCRIPTION POST. ACCOUNTS TAX SALES OTHER ACCOUNTS CREDIT CASH
REF RECEIVABLE PAYABLE CREDIT ACCOUNT TITLE POST. AMT. DEBIT
CREDIT CREDIT REF.
20--
Jan. 7 R. Anderson 
The “CR1” indicates that the transaction appears on page 1 of the cash receipts journal.
Name Roy Anderson Terms n/30
Address S. Hampton Rd, Dallas, Texas
DATE DESCRIPTION POST DEBIT CREDIT BALANCE
REF.
20--
Jan Balance 
3 Sales Slip S CR
31 Sales Slip S
Notice that CR1 indicates that the transaction appears on page 1 of the cash receipts journal.

62. CASH RECEIPTS JOURNAL PAGE 1
SALES
DATE DESCRIPTION POST. ACCOUNTS TAX SALES OTHER ACCOUNTS CREDIT CASH
REF RECEIVABLE PAYABLE CREDIT ACCOUNT TITLE POST. AMT. DEBIT
CREDIT CREDIT REF.
20--
Jan. 7 R. Anderson 
The “CR1” indicates that the transaction appears on page 1 of the cash receipts journal.
Name Roy Anderson Terms n/30
Address S. Hampton Rd, Dallas, Texas
DATE DESCRIPTION POST DEBIT CREDIT BALANCE
REF.
20--
Jan Balance 
3 Sales Slip S CR
31 Sales Slip S
The $432 payment reduces the customer’s account in the subsidiary ledger.

63. CASH RECEIPTS JOURNAL PAGE 1
SALES
DATE DESCRIPTION POST. ACCOUNTS TAX SALES OTHER ACCOUNTS CREDIT CASH
REF RECEIVABLE PAYABLE CREDIT ACCOUNT TITLE POST. AMT. DEBIT
CREDIT CREDIT REF.
20--
Jan. 7 R. Anderson 
The “CR1” indicates that the transaction appears on page 1 of the cash receipts journal.
Name Roy Anderson Terms n/30
Address S. Hampton Rd, Dallas, Texas
DATE DESCRIPTION POST DEBIT CREDIT BALANCE
REF.
20--
Jan Balance 
3 Sales Slip S CR
31 Sales Slip S
Make sure to put a check mark in the posting reference column of the cash receipts journal after the subsidiary account has been updated.

64. Advantages of the Cash Receipts Journal
A business must maintain an adequate cash flow (cash receipts less cash payments).

65. Saves time and effort when recording and posting cash receipts
The cash receipts journal:
Saves time and effort when recording and posting cash receipts
Allows for the division of work among the accounting staff
Strengthens the audit trail by recording all cash receipts transactions in one place
It saves time, effort, and recording space, permits the division of labor and strengthens the audit trail.

66. Complete the following sentences:
SECTION R E V I W
Complete the following sentences:
The __________________ is a special journal used to record and post transactions involving the receipt of cash.
cash receipts journal
Cash refers to currency, coins, checks, money orders, and _______________ ________.
funds on deposit
in a bank
Let’s review. . .
A cash receipts journal will always include a __________ column.
Cash Debit

67. Complete the following sentences:R E V I W
SECTION
Complete the following sentences:
A(n) __________________ is a form sent to a firm’s customers showing transactions during the month and the balance owed.
statement of account
The ______________ is used to handle payments involving small amounts of money.
petty cash fund
promissory note
A(n) ______________ is a written promise to pay a specified amount of money on a specific date.

68. College Accounting, 11th Edition
Thank You
for using
College Accounting, 11th Edition
Price • Haddock • Brock