1. LESSON 5-1 Checking Accounts
4/23/2017
LESSON 5-1
Checking Accounts
GREEN

2. Checking Account In accounting, money is usually referred to as cash.
Most businesses make major cash payments by cash. However, small cash payments for items such as postage and some supplies may be made from a cash fund kept at the place of business.
Because cash transactions occur more frequently than other types of transactions, more chances occur to make recording errors affecting cash.
A business form ordering a bank to pay cash from a bank account is known as a check. A bank account from which payments can be ordered by a depositor is called a checking account.

3. DEPOSITING CASH
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LESSON 5-1

4. DEPOSIT RECORDED ON A CHECK STUB
page 119
LESSON 5-1

5. Endorsements
Endorsement-a signature or stamp on the back of a check transferring ownership
Three types of Endorsements:
Blank-an endorsement consisting only of the endorser’s signature
Special (endorsements in full)-An endorsement indicating a new owner of a check is called – Pay to the order of
Restrictive-an endorsement restricting further transfer of a check’s ownership-stamps automatically being placed on check

6. ENDORSEMENTS Blank Endorsement Special Endorsement
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Blank Endorsement
Special Endorsement
Restrictive Endorsement
LESSON 5-1

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

8. COMPLETED CHECK 7. Write the date. 10. Write the amount in words.
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7. Write the date.
10. Write the amount in words.
8. Write to whom the check is to be paid.
11. Write the purpose of the check.
12. Sign the check.
9. Write the amount in figures.
LESSON 5-1

9. RECORDING A VOIDED CHECK
LESSON 5-1
4/23/2017
RECORDING A VOIDED CHECK
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1. Record the date in the Date column.
2. Write the word VOID in the Account Title column
3. Write the check number in the Doc. No. column.
4. Place a check mark in the Post. Ref. column.
5. Place a dash in both the Debit and Credit columns.
LESSON 5-1
GREEN

10. TERMS REVIEW code of conduct checking account endorsement
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code of conduct
checking account
endorsement
blank endorsement
special endorsement
restrictive endorsement
postdated check
LESSON 5-1

11. LESSON 5-2 Bank Reconciliation
4/23/2017
LESSON 5-2
Bank Reconciliation
GREEN

12. Bank Statement
A report of deposits, withdrawals, and bank balances sent to a depositor by a bank is called a bank statement.

13. BANK STATEMENT
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LESSON 5-2

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

15. RECORDING A BANK SERVICE CHARGE ON A CHECK STUB
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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. 1 2 3
LESSON 5-2

16. JOURNALIZING A BANK SERVICE CHARGE
page 127
August 31. Received bank statement showing August bank service charge, $8.00. Memorandum No. 3. 2 1 4 3
1. Write the date.
2. Write the title of the account debited. Record the debit amount.
3. Write the title of the account credited. Record the credit amount.
4. Write the source document number in the Doc. No. column.
LESSON 5-2

17. TERM REVIEW
page 128
bank statement
LESSON 5-2

18. LESSON 5-3 Dishonored Checks and Electronic Banking
4/23/2017
LESSON 5-3
Dishonored Checks and Electronic Banking
GREEN

19. Dishonored Check
A check that a bank refuses to pay is called a dishonored check. Banks dishonor a check when the account of the person who wrote the check has insufficient funds to pay the check.
Banks may dishonor a check for the following reasons:
The check appears to be altered
The signature of the person who signed the check does not match the one on the signature card at the bank
The amounts written in figures and in words do not agree
The check is postdated
The person who wrote the check has stopped payment on the check

20. RECORDING A DISHONORED CHECK ON A CHECK STUB
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1. Write Dishonored check $ 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. 1 2 3
LESSON 5-3

21. JOURNALIZING A DISHONORED CHECK
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November 29. Received notice from the bank of a dishonored check from Campus Internet Café, $70.00, plus $35.00 fee; total, $ Memorandum No. 55. 2 4 1 3
1. Write the date.
2. Write the title of the account debited. Write the debit amount.
3. Write the title of the account credited. Write the amount credited.
4. Write the source document number in the Doc. No. column.
LESSON 5-3

22. Electronic Funds Transfer
A computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents is called electronic funds transfer.

23. JOURNALIZING AN ELECTRONIC FUNDS TRANSFER
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September 2. Paid cash on account to Kelson Enterprises, $350.00, using EFT. Memorandum No. 10. 2 1 4 3
1. Write the date.
2. Write the title of the account debited. Record the amount debited.
3. Write the title of the account credited. Record the amount credited.
4. Write the source document number in the Doc. No. column.
LESSON 5-3

24. Debit Card
A bank card the automatically deducts the amount of a purchase from the checking account of the cardholder is called debit card.

25. JOURNALIZING A DEBIT CARD TRANSACTION
page 132
September 5. Purchased supplies, $24.00, using debit card. Memorandum No. 12. 2 1 4 3
1. Write the date.
2. Write the title of the account debited. Record the amount debited.
3. Write the title of the account credited. Record the amount credited.
4. Write the source document number in the Doc. No. column.
LESSON 5-3

26. TERMS REVIEW dishonored check electronic funds transfer debit card
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dishonored check
electronic funds transfer
debit card
LESSON 5-3

27. LESSON 5-4
4/23/2017
LESSON 5-4
Petty Cash
GREEN

28. PETTY CASH
An amount of cash kept on hand and used for making small payments is called petty cash.

29. ESTABLISHING A PETTY CASH FUND
page 134
August 19. Paid cash to establish a petty cash fund, $ Check No. 8. 2 1 4 3
1. Write the date.
2. Write the title of the account debited. Record the amount debited.
3. Write the title of the account credited. Record the amount credited.
4. Write the source document number in the Doc. No. column.
LESSON 5-4

30. MAKING PAYMENTS FROM A PETTY CASH FUND WITH A PETTY CASH SLIP
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A form showing proof of a petty cash payment is called a petty cash slip.
LESSON 5-4

31. REPLENISHING PETTY CASH
page 136
August 31. Paid cash to replenish the petty cash fund, $30.00: miscellaneous expense, $20.00; advertising, $ Check No. 12. 2 1 4 3
1. Write the date.
2. Write the title of the first account debited. Write the debit amount. Write the title of the second account. Record the debit amount.
3. Write the title of the account credited. Record the credit amount.
4. Write the source document number in the Doc. No. column.
LESSON 5-4

32. TERMS REVIEW
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petty cash
petty cash slip
LESSON 5-4