Chapter 5 Cash Control Systems 12 Checking accounts

Chapter 5 Cash Control Systems

12. Checking accounts Pages 119 - 121 Checking account– a bank account from which payments can be ordered by a depositor Endorsement– a signature or stamp on the back of a check transferring ownership Blank endorsement– only consist of endorser’s signature Special endorsement– an endorsement indicating a new owner of the check Restrictive endorsement – an endorsement restricting further transfer of a check’s ownership 2

ENDORSEMENTS page 120 Blank Endorsement Special Endorsement Restrictive Endorsement 3 LESSON 5 -1

Preparing a check 1. Write the date (month, day, year) • Postdated check – a check with a future date on it 2. Write to whom the check is to be paid 3. Write the amount in figures following $ 4. Write the amount in words before the word Dollars 5. Write the purpose of the check following the word For 6. Sign the check 4 Page 121

Preparing a check stub 7. Write the amount of the check 8. Write the date (month, day, year) 9. Write to whom the check is to be paid 10. Record the purpose of the check 11. Write the amount of the check following amt this check 12. Calculate the new checking account balance 5 Page 121

RECORDING A VOIDED CHECK 2 4 1 1. 2. 3. 4. 5. 6 page 122 3 Record the date. Write the word VOID in the Account Title column Write the check number. Place a check mark in the Post. Ref. column. Place a dash in the Cash Credit column. LESSON 5 -1 5

13. Bank Reconciliation Pages 124 - 127 Bank statement– a report with deposits, withdrawals, and bank balances sent to a depositor by a bank Code of conduct – a statement that guides the ethical behavior of a company 7

BANK STATEMENT RECONCILIATION 1. Date 2. Check Stub Balance 3. Service Charge 4. Adjusted Check Stub Balance 3 5. Bank Statement Balance 6. Outstanding Deposits 7. Subtotal 8. Outstanding Checks 9. Adjusted Bank Balance 10. Compare Adjusted Balances 8 LESSON 5 -2 page 125 1 2 5 6 7 4 8 9 10

RECORDING A BANK SERVICE CHARGE ON A CHECK STUB 9 LESSON 5 -2 page 126

JOURNALIZING A BANK SERVICE CHARGE page 127 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. 10 LESSON 5 -2 3

14. Dishonored Checks & Electronic Banking Pages 129 - 132 Dishonored check– a check that a bank refuses to pay Electronic funds transfer (EFT) – a computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents Debit card – a bank card that automatically deducts the amount of a purchase from the checking account 11

RECORDING A DISHONORED CHECK ON A CHECK STUB page 129 12 LESSON 5 -3

JOURNALIZING A DISHONORED CHECK page 130 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 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. 13 LESSON 5 -3 3

JOURNALIZING AN ELECTRONIC FUNDS TRANSFER page 131 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. 14 LESSON 5 -3 3

JOURNALIZING A DEBIT CARD TRANSACTION page 132 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. 15 LESSON 5 -3 3

15. Petty Cash Pages 134 - 136 Petty cash – an amount of cash kept on hand used for making small payments Petty cash slip – A form showing proof of a petty cash payment 16

ESTABLISHING A PETTY CASH FUND page 134 August 19. Paid cash to establish a petty cash fund, $100. Check No. 8. 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. 17 LESSON 5 -4 3

REPLENISHING PETTY CASH page 136 August 31. Paid cash to replenish the petty cash fund, $30. 00: miscellaneous expense, $20. 00; advertising, $10. 00. Check No. 12. 4 1 3 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. 18 LESSON 5 -4