Review / reference
Cash Receipts and Cash Disbursements Journals
A cash receipts journal records incoming cash, normally with a debit to Cash. A cash disbursements journal, also called a cash payments journal, records outgoing cash with a credit to Cash. The other account explains why money moved: receipts are not always revenue and disbursements are not always expenses.
At a glance
Meadow Design: balanced special-journal entries
Fictional educational example. Amounts are illustrative, not customer records.
| Journal / source | Event | Debit | Credit | Posting reference / subsidiary action |
|---|---|---|---|---|
| CR-01 / SR-20 | Cash services $600 | Checking $600 | Service revenue $600 | GL CR-01; service receipt retained |
| CR-02 / INV-19 | Customer collection $400 | Checking $400 | Receivables $400 | GL CR-02; customer invoice marked paid |
| CD-01 / BILL-08 | Supplier settlement $250 | Payables $250 | Checking $250 | GL CD-01; supplier bill marked paid |
| CD-02 / SUP-09 | Unused supplies $100 | Supplies $100 | Checking $100 | GL CD-02; acquisition receipt retained |
| CD-03 / TR-20 | Same-entity savings transfer $100 | Savings $100 | Checking $100 | GL CD-03; link both bank legs, one transfer entry |
Receipts: Checking debits $1,000 = Revenue credits $600 + Receivables credits $400.
Disbursements: Checking credits $450 = Payables debits $250 + Supplies debits $100 + Savings debits $100.
Checking ends $2,550. Combined cash increases $650 because the $100 internal transfer is not an external payment.
Total journal debits and credits are $1,450 each. Post individual entries or controlled totals, not both.
Step by step.
Separate receipts and payments
Retain the date, amount, account, payee or customer, and original source reference. Identify transfers between your own accounts.
Supply both sides of each entry
Use invoice, bill or agreement evidence to select the offsetting receivable, payable, revenue, expense, asset or equity account.
Post and cross-reference once
Choose an individual-entry or controlled batch-total posting method. Reconcile the journal totals and subsidiary records to the general ledger without posting both methods.
What each journal records
A cash receipt can be a sale paid immediately, collection of a customer debt, loan proceeds, owner funding or a refund. A cash disbursement can settle a supplier liability, buy an asset, pay a current expense or transfer money. Keep a separate explanation of economic purpose instead of naming every inflow Income and every outflow Expense.
Useful fields are date, source reference, customer or supplier, cash debit or credit, offsetting account, subsidiary-ledger reference and posting reference. Special journals can total frequently used columns, but unusual offsets still need an identified account. OpenStax describes this relationship between journal totals, individual customer records and general-ledger postings.
Fictional receipts journal: $1,000 collected
In a separate October exercise, Meadow Design begins with Checking $2,000, an existing customer receivable of $400 and an existing supplier payable of $250. Receipt CR-01, supported by service receipt SR-20, records a $600 cash service sale: debit Checking $600 and credit Service revenue $600.
Receipt CR-02 collects the $400 already owed on invoice INV-19: debit Checking $400 and credit Accounts receivable $400, also updating that customer’s subsidiary record. Total cash debits are $1,000, matched by revenue credits of $600 and receivable credits of $400. Crediting revenue for both receipts would overstate this period’s revenue by $400.
Fictional disbursements journal: $450 paid
Payment CD-01 settles supplier bill BILL-08 for $250: debit Accounts payable $250 and credit Checking $250. Update the supplier detail as paid. Payment CD-02 buys $100 of unused supplies under receipt SUP-09: debit Supplies $100 and credit Checking $100.
Payment CD-03 moves $100 to the same business’s savings account under transfer confirmation TR-20: debit Savings $100 and credit Checking $100. Total Checking credits are $450, matched by debits of $250 Payables, $100 Supplies and $100 Savings. None of these three movements is a new current-period expense under the stated facts.
Post to the ledger and preserve the references
Checking ends at $2,000 + $1,000 - $450 = $2,550. Savings increases by $100, so combined cash rises by $650: outside receipts $1,000 less outside payments $350. The internal transfer changes the location of cash, not the combined cash total.
For this small exercise, post each CR or CD entry once to the ledger and carry its reference to the relevant customer or supplier record. If instead a business posts special-journal control totals, it must not also repost the individual lines to the same control accounts. The two receipts and three payments total $1,450 of debits and $1,450 of credits across all affected accounts.
Transfers and noncash activity need explicit controls
The receiving savings statement also shows $100 in. Link that row to CD-03 rather than adding another revenue receipt or another complete transfer entry. Preserve each account’s bank evidence while recording the accounting event once.
Unpaid sales, depreciation and adjusting entries belong in the appropriate other journals, not in cash journals merely to fill a gap. Reconcile bank activity to Checking separately, and confirm that customer and supplier detail agrees with the control accounts. Fulla exports statement data for review; it does not determine these offsets, post special journals or replace the subsidiary ledgers.
Sources and documentation
- OpenStax: cash receipts, disbursements and subsidiary-ledger postings(opens in a new tab)
- OpenStax: initial steps in the accounting cycle(opens in a new tab)
Follow the source links for original definitions and current product requirements.
Questions about this guide
What is a cash disbursement?
It is a payment of cash. It may settle an existing liability, purchase an asset or pay an expense. The payment direction alone does not establish its accounting classification.
Does a cash receipts journal include customer collections?
Yes. A collection normally debits Cash and credits the customer’s receivable if revenue was already recorded with the invoice. Do not recognize that revenue a second time.