Chapter 6 – Cash Control Systems Accounting I Chapter 6 – Cash Control Systems

TERMS REVIEW checking account endorsement blank endorsement special endorsement restrictive endorsement postdated check Lesson 6-1, page 124

TERMS REVIEW Checking Account A bank account from which payments can be ordered by a depositor. Lesson 6-1, page 126

TERMS REVIEW Endorsement A signature or stamp on the back of a check transferring ownership. Lesson 6-1, page 127

TERMS REVIEW Blank Endorsement An endorsement consisting only of the endorser’s signature. Lesson 6-1, page 127

TERMS REVIEW Special Endorsement An endorsement indicating a new owner of a check. (a.k.a. 3rd party checks or endorsements in full) Lesson 6-1, page 127

TERMS REVIEW Restrictive Endorsement. An endorsement restricting further transfer of a check’s ownership. Lesson 6-1, page 127

TERMS REVIEW Postdated Check A check with a future date on it. (Not acceptable for of dating a check.) Lesson 6-1, page 128

Lesson 6-1 DEPOSITING CASH Lesson 6-1, page 126

DEPOSIT RECORDED ON A CHECK STUB Lesson 6-1, page 126

BLANK ENDORSEMENT, SPECIAL ENDORSEMENT, AND RESTRICTIVE ENDORSEMENT Lesson 6-1, page 127

COMPLETED CHECK STUB AND CHECK 1 2 7 3 4 8 9 10 11 12 5 6 Preparing check stubs Preparing checks 1. Write the amount of the check. 7. Write the date. 2. Write the date of the check. 8. Write to whom the check is to be paid. 3. Write to whom the check is to be paid. 9. Write the amount in figures. 4. Record purpose of the check. 10. Write the amount in words. 5. Write the amount of the check. 11. Write the purpose of the check. 6. Calculate the new account balance. 12. Sign the check. Lesson 6-1, page 128-129

RECORDING A VOIDED CHECK  4 1 2 3 5 1. Record the date. 2. Write the word VOID in the account title. 3. Write the check number. 4. Place a check mark in the Post. Ref. column. 5. Place a dash in the Cash Credit column. Lesson 6-1, page 129

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TERMS REVIEW bank statement Lesson 6-2, page 135

TERMS REVIEW Bank Statement A report of deposits, withdrawals, and bank balances sent to a depositor by a bank. Lesson 6-2, page 131

BANK STATEMENT Lesson 6-2, page 131

BANK STATEMENT RECONCILIATION 1. Date 1 2. Check Stub Balance 2 5 3. Service Charge 3 6 4. Adjusted Check Stub Balance 7 8 5. Bank Statement Balance 6. Outstanding Deposits 9 4 10 7. Subtotal 8. Outstanding Checks 9. Adjusted Bank Balance Lesson 6-2, page 132 10. Compare Adjusted Balances

RECORDING A BANK SERVICE CHARGE ON A CHECK STUB 1. Write Service Charge. 2. Write the amount of the service charge. 3. Calculate and record the new subtotal. 2 1 3 Lesson 6-2, page 133

JOURNALIZING A BANK SERVICE CHARGE 1 2 4 3 1. Write the date. 2. Debit Miscellaneous Expense. 3. Credit Cash. 4. Write the source document number. Lesson 6-2, page 134

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TERMS REVIEW dishonored check electronic funds transfer debit card Lesson 6-3, page 140

TERMS REVIEW Dishonored Check A check that a bank refuses to pay. Lesson 6-3, page 136

TERMS REVIEW Electronic Funds Transfer (EFT) A computerized cash payments system that uses electronic impulses to transfer funds. Lesson 6-3, page 138

TERMS REVIEW Debit Card A bank card that, when making purchases, automatically deducts the amount of the purchase from the checking account. Lesson 6-3, page 139

RECORDING A DISHONORED CHECK ON A CHECK STUB 1. Write Dishonored Check $50.00. 2. Write the amount of the dishonored check. 3. Calculate and record the new subtotal. 2 1 3 Lesson 6-3, page 136

JOURNALIZING A DISHONORED CHECK November 29. Received notice from the bank of a dishonored check from Learn N Play, $35.00, plus $15.00 fee; total, $50.00. Memorandum No. 55. Cash Accounts Rec.—Learn N Play 1. Which accounts are affected? Accounts Receivable—Learn N Play Cash Debit Normal Balance 50.00 2. How is each account classified? Accounts Receivable—Learn N Play is an asset account. Cash is an asset account.  Debit Normal Balance 3. How is each classification changed? Assets are increased. Assets are decreased. 50.00  4. How is each amount entered in the accounts? Assets increase on the debit side. Assets decrease on the credit side. Lesson 6-3, page 137

JOURNALIZING A DISHONORED CHECK 4 3 1 2 1. Write the date. 2. Debit Accounts Receivable—Learn N Play. 3. Credit Cash. 4. Write the source document number. Lesson 6-3, page 137

JOURNALIZING AN ELECTRONIC FUNDS TRANSFER 4 3 1 2 1. Write the date. 2. Debit Accounts Payable—Kelson Enterprises. 3. Credit Cash. 4. Write the source document number. Lesson 6-3, page 138

JOURNALIZING A DEBIT CARD TRANSACTION 4 3 1 2 1. Write the date. 2. Debit Supplies. 3. Credit Cash. 4. Write the source document number. Lesson 6-3, page 139

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TERMS REVIEW petty cash petty cash slip Lesson 6-4, page 144

TERMS REVIEW Petty Cash An amount of cash kept on hand and used for making small payments. Lesson 6-4, page 141

TERMS REVIEW Petty Cash Slip A form showing proof of a petty cash payment. Lesson 6-4, page 142

ESTABLISHING A PETTY CASH FUND Lesson 6-1 ESTABLISHING A PETTY CASH FUND August 17. Paid cash to establish a petty cash fund, $200.00. Check No. 8. Cash Petty Cash 1. Which accounts are affected? Petty Cash Cash Debit Normal Balance 200.00  2. How is each account classified? Petty Cash is an asset account. Cash is an asset account. Debit Normal Balance 3. How is each classification changed? Assets are increased. Assets are decreased. 200.00  4. How is each amount entered in the accounts? Assets increase on the debit side. Assets decrease on the credit side. Lesson 6-4, page 141

ESTABLISHING A PETTY CASH FUND 4 3 1 2 1. Write the date. 2. Debit Petty Cash. 3. Credit Cash. 4. Write the source document number. Lesson 6-4, page 141

MAKING PAYMENTS FROM A PETTY CASH FUND WITH A PETTY CASH SLIP Lesson 6-4, page 142

REPLENISHING PETTY CASH 4 3 2 1 1. Write the date. 2. Debit Miscellaneous Expense and Advertising Expense. 3. Credit Cash. 4. Write the source document number. Lesson 6-4, page 143

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