What does the cash payments journal primarily record?

The cash payments journal is specifically designed to record all transactions that involve cash disbursements. This means it tracks payments made out of cash for various items, such as expenses, services rendered, or any other cash transactions that reduce the cash balance. By focusing on cash payments, this journal provides a clear and organized way to monitor outflows of cash, which is crucial for maintaining accurate financial records.

In the context of bookkeeping and accounting for a funeral home or similar business, accurately recording cash payments is essential for budgeting and financial planning. The cash payments journal helps identify how funds are being spent, allowing for proper tracking and management of expenses. This enhances overall financial transparency and aids in avoiding potential cash flow issues.

The other options mentioned involve various aspects of financial transactions but do not pertain specifically to cash payments. For example, sales made on credit represent receivables rather than cash transactions. Cash transactions received would be recorded in a cash receipts journal, and inventory purchases are typically tracked differently, as they involve asset management rather than immediate cash outflows. Thus, the primary function of the cash payments journal is to document transactions where cash is being paid out, making option C the most accurate choice.