TOPIC 7UNIT 1

Concept of a Cash Receipts Journal (CRJ) for a service business

Businesses have many transactions that take place during a business day.

Businesses use journals to record transactions on a daily basis.

There are up to ten possible journals that a business may need to use.

Cash receipts Journal and Cash Payments Journal are used by a business to record transactions that take place the most frequently in a business: Receiving money Paying money

Why do businesses need a CRJ?

TOPIC 7UNIT 2

Formats and uses of the columns of a CRJ

The format of the CRJ depends on the nature of the business and the kind of transactions that take place in the business.

We will be looking at service businesses first, these are businesses that sell a service only and not stock,

A service business sells a service that people are prepared to pay for.

Examples: Plumber, hairdresser and electrician Cash register roll (CRR) – any money the business

receives is recorded on a source document called the CRR

What does a CRJ look like?

The complete CRJ for a service business

TOPIC 7UNIT 4

Entering cash receipts transactions into the CRJ

Some possible transactions for the CRJ

The owner outs capital into the business. Loans are received. Money is received for providing services (current

income) Rent money is received for letting out property

(rent income) Interest on a current bank account received. The business receives a cash refund from a

supplier.

Recording transactions in journals

TOPIC 7UNIT 5

Closing the CRJ at the end of the month

At the end of the month the columns of the journal are totalled.

We call this the closing of the journals. The total of the bank column shows the total cash

received by the business for the month. The journals should cross check – this means that

the total of the bank column should be equal to the total of all the other columns together.

Totalling the CRJ at the end of the month

TOPIC 7UNIT 6

The effect of cash receipts transactions on the Accounting

Equation

The Accounting Equation and the cash receipt transactions