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