A cash receipts journal is a subsidiary ledger in which cash sales are recorded. This journal is used to offload transaction volume from the general ledger, where it might otherwise clutter up the general ledger. The journal contains the following fields:
Identification of cash receipt, which may be any of the following:
Debit and credit columns to record both sides of each entry; the normal entry is a debit to cash and a credit to sales
There may be a large number of entries into this journal, depending on the frequency of cash receipts from customers.
The balance in the journal is regularly summarized into an aggregate amount and posted to the general ledger. If someone needs to investigate a specific cash receipt, they might begin at the general ledger and then move down to the cash receipts journal, from which they might obtain a reference to the specific receipt.
The cash receipts journal is most commonly found in manual accounting systems. The concept is essentially invisible in many accounting software packages.