1. Cash controls and banking activities
Chapter 11

2. Protecting Cash
Internal Controls – Procedures within the business that are designed to protect cash and other assets and to keep reliable records
Examples (pg 278)
External Controls – Procedures outside the business to protect cash and other assets
Examples

3. The Checking Account Checking Account –
Check – Written order from a depositor telling the bank to pay the stated amount
Depositor – Person or business that has cash on deposit in a bank
ABA Number – Fractional # listed below check #
Signature Card – Contains authorized signature to write checks on an account
Deposit Slip – Bank form listing the cash and checks to be deposited

4. The Checking Account
Endorsement – Authorized signature written or stamped on back of check
Blank (Just a signature)
Special (Pay to the order of…)
Restrictive (For Deposit Only, Signature)
Payee –
Drawer – Person who signs check
Drawee – Bank on which the check is written
Voiding a Check -

5. Reconciling the Bank Statement
Proving Cash
If all transactions have been journalized and posted
Cash in Bank Balance = Checkbook Balance
Bank Statement – Itemized record of all transactions over a given period (month)
Canceled Checks – Checks that have cleared
Some banks mail them back to you
Imaged Checks – Copies of the original

6. Reconciling the Bank Statement
Reconciling the Bank Statement – Process of determining differences between bank statement and checkbook
Usually Bank Balance ≠ Checkbook Balance
Why?
Outstanding Transactions
Mistakes

7. Reconciling the Bank Statement
Outstanding Checks – Written but not cashed yet
Outstanding Deposits – Recorded in checkbook but not on bank statement
Bank Service Charge – Fee charged by the bank
Miscellaneous Expense

8. Reconciling the Bank Statement
Steps on pg 287
Complete the Bank Reconciliation Form

9. Journalizing Service Charges
Debit Miscellaneous Expense
Credit Cash

10. More Checking Vocabulary
Stop Payment Order
NSF check
Check 21
Postdated check

11. Even More Checking Vocabulary
Electronic Funds Transfer System (EFTS)
Bankcard
Automated teller machine (ATM)