Cash Payments & Cash Receipts Journals
As the enterprise grows, the number of transactions grows and thus the need for more people in the accounting function. In order to be efficient, we will not solely rely on the general journal for all entries. We will departmentalize similar functions within the department. All cash receipts will be booked by the cash receipts department and all cash disbursements will be booked by the cash disbursements department. Instead of using only the general journal for such activities, each department will now have its own journal; the cash receipts journal and the cash disbursements journal, respectively. It is important to remember each entry only goes in one journal. You can imagine the general journal will begin to appear shorter with this new efficiency!
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- John Templeton, HCCS Accounting Instructor
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