ACCOUNTING 1 Cash Control Systems Chapter 5 Advanced

ACCOUNTING 1 Cash Control Systems Chapter 5

Advanced organizer of our unit objective:

Advanced organizer of our unit objective:

Advanced organizer of our unit objective:

The most important asset CASH Safety measures or Cash Control Systems are needed because: • of the frequency of cash transactions more chances for errors occur affecting cash. • Cash can transferred one person to another without question of ownership • Plus, cash may be lost as is it is moved around.

OPENING A CHECKING ACCOUNT • Each person authorized to sign checks must complete and sign a signature card. – This card is used to verify the depositor’s signature on any banking transactions.

ENDORSEMENTS on back of checks Blank Endorsement Special Endorsement Restrictive Endorsement

COMPLETED CHECK STUB 1 2 page 121 1. Write the amount of the check. 3 2. Write the date of the check. 3. Write to whom the check is to be paid. 4 4. Record the purpose of the check. 5. Write the amount of the check. 5 6 6. Calculate the new checking account balance.

COMPLETED CHECK 7 $27500/100 9 8 10 11 7. Write the date. 8. Write to whom the check is to be paid. 9. Write the amount in figures. 12 10. Write the amount in words. 11. Write the purpose of the check. 12. Sign the check.

Work Together 5 -1 continued…

BANK STATEMENT

BANK STATEMENT RECONCILIATION 1 1. Date 2. Check Stub Balance 3. Service Charge? 4. Adjusted Check 3 Stub Balance 5. Bank Statement Balance 6. Outstanding Deposits ? 7. Subtotal 8. Outstanding Checks ? 9. Adjusted Bank Balance 10. Compare Adjusted Balances 2 5 6 7 4 8 9 10

RECORDING A BANK SERVICE CHARGE ON A CHECK STUB page 126 1 2 3 1. Write Service Charge $8. 00 on the check stub under the heading “Other. ” 2. Write the amount of the service charge in the amount column. 3. Calculate and record the new subtotal on the Subtotal line.

JOURNALIZING A BANK SERVICE CHARGE August 31. Received bank statement showing August bank service charge, $8. 00. Memorandum No. 3. 4 1 2 1. Date. Write the date. 2. Debit. Write the title of the account to be debited. Record the amount debited. 3. Credit. Record the amount credited. 4. Source document. Write the source document number. 3

Work Together 5 -2 continued…

On Your Own 5 -2 continued…

Reflection…. All about the Ca$h Checks Bank Reconciliation

RECORDING A DISHONORED CHECK ON A CHECK STUB Dishonored check: a check that a bank refuses to pay. Reasons include: insufficient funds, altered (fraud), postdated, stop-payments. 1 2 3 1. Write Dishonored check $105. 00 on the line under the heading “Other. ” 2. Write the total of the dishonored check in the amount column. 3. Calculate and record the new subtotal on the Subtotal line.

JOURNALIZING A DISHONORED CHECK November 29. Received notice from the bank of a dishonored check from Campus Internet Café, $70. 00, plus $35. 00 fee; total, $105. 00. Memorandum No. 55. 1 Why Accounts Receivable? 4 2 1. Date. Write the date. 2. Debit. Write the title of the account to be debited. 3. Credit. Write the amount credited. 4. Source document. Write the source document number. Because you still have to receive the money if the check “bounced”! 3 + -

JOURNALIZING AN ELECTRONIC FUNDS TRANSFER September 2. Paid cash on account to Kelson Enterprises, $350. 00, using EFT. Memorandum No. 10. 4 1 2 1. Date. Write the date. 2. Debit. Write the title of the account to be debited. Record the amount debited. 3. Credit. Record the amount credited. 4. Source document. Write the source document number. 3 - + + -

JOURNALIZING A DEBIT CARD TRANSACTION September 5. Purchased supplies, $24. 00, using debit card. Memorandum No. 12. 4 1 2 1. Date. Write the date. 2. Debit. Write the title of the account to be debited. Record the amount debited. 3. Credit. Record the amount credited. 4. Source document. Write the source document number. 3 + -

THE PETTY CASH FUND • A fund set up to pay for small items with cash – Checks for very small amounts are cumbersome • To establish the fund: – A check is written to the petty cash custodian for the amount to be set aside in the fund – The custodian cashes the check and places the money in a petty cash box • The custodian should be the only person authorized to make payments from the fund.

ESTABLISHING A PETTY CASH FUND August 17. Paid cash to establish a petty cash fund, $100. Check No. 8. 4 1 3 2 1. Date. Write the date. 2. Debit. Write the title of the account to be debited. Record the amount debited. 3. Credit. Record the amount credited. + 4. Source document. Write the source document number. + -

MAKING PAYMENTS FROM A PETTY CASH FUND WITH A PETTY CASH SLIP Petty Cash Slip: A form showing proof of a petty cash payment (receipts should be attached if applicable)

REPLENISHING PETTY CASH August 31. Paid cash to replenish the petty cash fund, $30. 00: miscellaneous expense, $20. 00; advertising, $10. 00. Check No. 12. 4 1 2 1. Date. Write the date. 2. Debit. Write the title of the first account to be debited. Write the amount to be debited. Write the title of the second account to be debited. Record the amount to be debited. 3. Credit. Record the amount credited. 4. Source document. Write the source document number. 3