Basic Bookkeeping Lesson 11: Post a Cash Receipts Journal to a General Ledger

In my last article, I explained how to use a Cash Receipts Journal to collect transactions together before posting them to the General Ledger.  Since the purpose of a subsidiary journal is to summarize similar transactions in order to decrease the number of entries in the general ledger, this article will discuss how to post the totals of the Cash Receipts Journal to the General Ledger.

Posting the Cash Receipts Journal to the General Ledger is Lesson 11 in the Authentically Ash Basic Bookkeeping Course.

How to post a cash receipts journal to a general ledger

Example of Cash Receipt Journal Entries | AuthenticallyAsh.com

The above image is the Cash Receipts Journal for Johnson Mechanics (an example business).  You will notice that I totaled the Bank, Current Income and Sundry Accounts columns.   So, the first step is to total the columns of the Cash Receipts Journal.  Notice that we do not total the Analysis of Receipts column.  This column is only used to show the amount of cash the business has on hand before it is banked.

Using Folio References

It is now time to discuss the folio references in more detail.  At the simplest level, we separate the General Ledger accounts into 2 types of accounts, the Balance Sheet accounts and the Nominal Accounts.

Balance Sheet accounts include the Equity Accounts (e.g. Capital) and the Asset Accounts (e.g. Bank, vehicles, equipment etc.).  The folio number of these accounts starts with the letter ‘B’.

Nominal accounts include the income accounts (e.g. current income, member contribution etc.) and expense accounts (e.g. rent expense, groceries etc.).  The folio number of these accounts starts with the letter ‘N’.

Here is an example of the Cash Receipts Journal with the Folio numbers filled in:
Cash Receipts Journal Example with Folio Numbers | AuthenticallyAsh.com

Transferring the Totals to the General Ledger

Lastly, you will transfer the totals from the Cash Receipts Journal to the general ledger.  Here is the example of the General Ledger once the totals have been transferred.

Example of post a cash receipts journal to a general ledger | AuthenticallyAsh.com

Posting the Bank Column to the General Ledger

The first column that is posted to the General Ledger is the bank column of the Cash Receipts Journal.  The total of the Bank Column is $73,500.  Because Cash is an asset, and assets increase on the debit side, you will post the Total Receipts amount to the Bank Account of the General Ledger on the Debit side.  Notice how the folio number CRJ1 (Cash Receipt Journal page 1) is entered.  This tells the reader where to go to see the details of the Total Receipts for the month.

Instead of writing each Contra-account into the details column, we just write Total Receipts or Miscellaneous Accounts.  This phrase indicates that more than one contra-account is credited.

Posting the Analysis Columns to the General Ledger

After the bank account is posted to the General Ledger, you will post the Analysis Columns.  In our example, the only analysis column is “Current Income”.  The Current Income column has the total of $3,500.  Because Income increases owner’s equity, we will credit the Current Income in the General Ledger.  If you don’t understand why Income is credited, please review my lesson on the Accounting Equation.

Since the Contra-Account is the Bank Account, we will write “Bank” under the details.  The folio number will be CRJ1 because the details of the Current Income is seen in the Cash Receipts Journal page 1.

You will do this for all the analysis columns in the Cash Receipts Journal.

Posting the Sundry Accounts to the General Ledger

Each entry into the sundry accounts column of the Cash Receipts Journal will be posted to the General Ledger as an individual entry.  Since there is only the Capital Contribution in our example, we will only transfer the Capital Contribution entry to the General Ledger.  As with the Income, the Capital Contribution increases Owner’s Equity, therefore we will Credit the amount.

The Contra-Account is the Bank Account, and the Folio number is CRJ1.

A note about the dates

The totals of the Cash Receipts Journal are entered into the General Ledger using the last day of the month.  The Sundry Accounts are entered into the General Ledger using the date that the transaction took place.

Steps to posting the cash receipts journal to the general ledger

Step 1:  Total the columns of the Cash Receipts Journal.

Step 2:  Write in the Folio numbers of the general ledger accounts that you are posting the totals to.

Step 3:  Transfer the total of the bank column to the General Ledger accounts.

Step 4:  Transfer the totals of the Analysis Columns to the General Ledger accounts.

Step 5:  Transfer the sundry account entries to the General Ledger accounts.

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Leave a Reply

Your email address will not be published. Required fields are marked *