Which statement about the cash receipts journal is true?

Which statement about the cash receipts journal is true?

• A. It records disbursements of cash.
• B. It provides the initial record of cash received.
• C. It is not a book of original entry.
• D. It records only payroll transactions.

Answer: (B)

When cash comes into the agency, the cash receipts journal is used to record those inflows as the initial entry. It captures each receipt—the date, source, amount, and how the cash is allocated to funds or revenue accounts—and then that information is posted to the appropriate ledgers. This is why it provides the initial record of cash received. Disbursements, not receipts, are tracked in the cash disbursements journal, so that statement isn’t true. The cash receipts journal is indeed a book of original entry, so saying it isn’t would be incorrect. And payroll transactions aren’t restricted to this journal; payroll-related cash movements typically go through payroll or cash disbursements records rather than the receipts journal alone.

When cash comes into the agency, the cash receipts journal is used to record those inflows as the initial entry. It captures each receipt—the date, source, amount, and how the cash is allocated to funds or revenue accounts—and then that information is posted to the appropriate ledgers. This is why it provides the initial record of cash received.

Disbursements, not receipts, are tracked in the cash disbursements journal, so that statement isn’t true. The cash receipts journal is indeed a book of original entry, so saying it isn’t would be incorrect. And payroll transactions aren’t restricted to this journal; payroll-related cash movements typically go through payroll or cash disbursements records rather than the receipts journal alone.