9-1
Cash Receipts, Cash
Payments, and Banking
Procedures
Section 1: Cash Receipts
Chapter
9
Section Objectives
1. Record cash receipts in a cash receipts journal.
2. Account for cash short or over.
3. Post from the cash receipts journal to subsidiary
and general ledgers.
McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
9-3
Cash Transactions
9-4
In accounting, cash refers to
currency, coins, checks, money
orders, and funds on deposit in a
bank.
ANSWER:
QUESTION:
What is cash?
9-5
Cash Receipts
9-6
Supermarkets receive checks as well as
currency and coins.
Department stores receive checks in the
mail from charge account customers.
Wholesalers usually receive cash in the
form of checks.
The type of cash receipts depends on
the nature of the business.
9-7
Cash Payments
9-8
Sometimes a limited number of
transactions are paid with currency and
coins.
For safety and convenience, most
businesses make payments by check.
9-9
A petty cash fund is a special-
purpose fund used to handle
payments involving small amounts
of money.
ANSWER:
QUESTION:
What is a petty cash fund?
9-10
The Cash Receipts Journal
9-11
A cash receipts journal is a special
journal used to record and post
transactions involving the receipt of
cash.
ANSWER:
QUESTION:
What is a cash receipts journal?
9-12
Recording Transactions in the Cash Receipts Journal
9-13
Objective 1
Record cash receipts in a
cash receipts journal.
9-14
ACCOUNT NAME POST.
REF.
AMOUNT
OTHER ACCOUNTS CREDITCASH
DEBIT
SALES
CREDIT
SALES TAX
PAYABLE
CREDIT
ACCOUNTS
RECEIVABLE
CREDIT
POST.
REF.DESCRIPTION DATE
CASH RECEIPTS JOURNAL PAGE 1
Debits to Cash
The cash receipts journal has separate columns for accounts that are
frequently used.
9-15
ACCOUNT NAME POST.
REF.
AMOUNT
OTHER ACCOUNTS CREDITCASH
DEBIT
SALES
CREDIT
SALES TAX
PAYABLE
CREDIT
ACCOUNTS
RECEIVABLE
CREDIT
POST.
REF.DESCRIPTION DATE
CASH RECEIPTS JOURNAL PAGE 1
There are columns for:
Credits to Accounts Receivable for
payments received on account
9-16
ACCOUNT NAME POST.
REF.
AMOUNT
OTHER ACCOUNTS CREDITCASH
DEBIT
SALES
CREDIT
SALES TAX
PAYABLE
CREDIT
ACCOUNTS
RECEIVABLE
CREDIT
POST.
REF.DESCRIPTION DATE
CASH RECEIPTS JOURNAL PAGE 1
There are columns for:
Credits to Sales and
Sales Tax Payable
for cash sales
9-17
ACCOUNT NAME POST.
REF.
AMOUNT
OTHER ACCOUNTS CREDITCASH
DEBIT
SALES
CREDIT
SALES TAX
PAYABLE
CREDIT
ACCOUNTS
RECEIVABLE
CREDIT
POST.
REF.DESCRIPTION DATE
CASH RECEIPTS JOURNAL PAGE 1
At the end of the month, the totals of all these columns are posted to
the general ledger.
9-18
ACCOUNT NAME POST.
REF.
AMOUNT
OTHER ACCOUNTS CREDITCASH
DEBIT
SALES
CREDIT
SALES TAX
PAYABLE
CREDIT
ACCOUNTS
RECEIVABLE
CREDIT
POST.
REF.DESCRIPTION DATE
The Other Accounts Credit section
includes entries that do not fit into the
special columns.
CASH RECEIPTS JOURNAL PAGE 1
9-19
Consider the cash sales entries for
January 8 in the cash receipts journal for
The Style Shop.
Cash Sales and Sales Taxes
9-20
ACCOUNT NAME POST.
REF.
AMOUNT
20--
Jan.Jan. 7 Roy Anderson 432.00 432.00
ACCOUNTS
RECEIVABLE
CREDIT
POST.
REF.DESCRIPTION DATE
OTHER ACCOUNTS CREDITCASH
DEBIT
SALES
CREDIT
SALES TAX
PAYABLE
CREDIT
8 Cash Sales 360.00 4,500.00 4,860.00
CASH RECEIPTS JOURNAL PAGE 1
The sales tax collected is entered in
the Sales Tax Payable Credit column.
9-21
ACCOUNT NAME POST.
REF.
AMOUNT
20--
Jan.Jan. 7 Roy Anderson 432.00 432.00
ACCOUNTS
RECEIVABLE
CREDIT
POST.
REF.DESCRIPTION DATE
OTHER ACCOUNTS CREDITCASH
DEBIT
SALES
CREDIT
SALES TAX
PAYABLE
CREDIT
8 Cash Sales 360.00 4,500.00 4,860.00
CASH RECEIPTS JOURNAL PAGE 1
The sales is entered in the Sales
Credit column.
9-22
ACCOUNT NAME POST.
REF.
AMOUNT
20--
Jan.Jan. 7 Roy Anderson 432.00 432.00
ACCOUNTS
RECEIVABLE
CREDIT
POST.
REF.DESCRIPTION DATE
OTHER ACCOUNTS CREDITCASH
DEBIT
SALES
CREDIT
SALES TAX
PAYABLE
CREDIT
8Cash Sales 360.00 4,500.00 4,860.00
CASH RECEIPTS JOURNAL PAGE 1
The cash received is entered in
the Cash Debit column.
9-23
ACCOUNT NAME POST.
REF.
AMOUNT
20--
Jan.Jan. 7 Roy Anderson 432.00 432.00
ACCOUNTS
RECEIVABLE
CREDIT
POST.
REF.DESCRIPTION DATE
OTHER ACCOUNTS CREDITCASH
DEBIT
SALES
CREDIT
SALES TAX
PAYABLE
CREDIT
8 Cash Sales 360.00 4,500.00 4,860.00
Confirm that total credits equal
total debits.
CASH RECEIPTS JOURNAL PAGE 1
9-24
Thank Youfor using
College Accounting, 11th Edition
Price • Haddock • Brock