Cash receipt definition

What is a Cash Receipt?

A cash receipt is a printed statement of the amount of cash received in a cash sale transaction. A copy of this receipt is given to the customer, while another copy is retained for accounting purposes. A cash receipt contains the following information:

  • The date of the transaction

  • A unique number that identifies the document

  • The name of the payer

  • The amount of cash received

  • The payment method (such as by cash or check)

  • The signature of the receiving person

Cash Receipt vs. Invoice

A cash receipt shows that money has been received in a business transaction, while an invoice is a request for payment. Thus, a cash receipt represents cash in hand, while an invoice represents the future receipt of cash.

Accounting for a Cash Receipt

The receipt of cash triggers an accounting entry, so that the transaction is recorded in your accounting records. The standard cash receipt journal entry for a sale transaction is a debit to the cash account and a credit to the sales account. Or, if the cash receipt is related to the sale of a company asset, such as machinery, then the credit part of the journal entry is an offset to the relevant asset account.

Related AccountingTools Course

Optimal Accounting for Cash