1. Vocabulary Test Review © 2014 Cengage Learning. All Rights Reserved. Work at understanding the concepts. You will find that many accounting chapters build on previously learned concepts. The more you understand, the easier accounting gets.

2. © 2014 Cengage Learning. All Rights Reserved. Safety Measure: Checking Account ●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. SLIDE 2 LO1 Lesson 5-1

3. © 2014 Cengage Learning. All Rights Reserved. Depositing Cash ●A bank form which lists the checks, currency, and coins an account holder is adding to the bank account is called a deposit slip. ●This form is prepared whenever cash or checks are placed into a bank account. It becomes proof of your deposit at the bank. SLIDE 3 LO1 Lesson 5-1

4. © 2014 Cengage Learning. All Rights Reserved. Deposit Recorded on a Check Stub SLIDE 4 LO1 Lesson 5-1

5. © 2014 Cengage Learning. All Rights Reserved. Checks ●A signature or stamp on the back of a check transferring ownership is called an endorsement. ●Three types of commonly used endorsements ●Blank endorsement ●Special endorsement ●Restrictive endorsement SLIDE 5 LO2 Lesson 5-1

6. © 2014 Cengage Learning. All Rights Reserved. Types of Endorsements ●An endorsement consisting only of the endorser’s signature is called a blank endorsement. ●If endorsed with a blank endorsement, the check could be cashed by anyone who has the check. SLIDE 6 LO2 Lesson 5-1

7. © 2014 Cengage Learning. All Rights Reserved. Endorsements ●An endorsement indicating a new owner of a check is called a special endorsement. ●It lists “Pay to the order of” and the new check owner’s name. SLIDE 7 LO2 Lesson 5-1

8. © 2014 Cengage Learning. All Rights Reserved. Endorsements ●An endorsement restricting further transfer of a check’s ownership is called a restrictive endorsement. SLIDE 8 LO2 Lesson 5-1

9. © 2014 Cengage Learning. All Rights Reserved. Completed Check Stub and Check SLIDE 9 LO3 Lesson 5-1

10. © 2014 Cengage Learning. All Rights Reserved. Voided checks should be recorded in the journal. Void is also written on the check stub and on the check itself. Then a new check is written. Recording a Voided Check when an error is made in preparing a check. SLIDE 10 LO3 Lesson 5-1

11. © 2014 Cengage Learning. All Rights Reserved. Bank Statement SLIDE 11 LO4 Lesson 5-2 ●A report of deposits, withdrawals, and bank balances sent to a depositor by a bank is called a bank statement. ●A check which has been paid by the bank is called a canceled check.

12. © 2014 Cengage Learning. All Rights Reserved. Bank Statement Reconciliation SLIDE 12 LO4 Lesson 5-2 Bank Statement Balance 5 5 Adjusted Check Stub Balance 4 4 Check Stub Balance 2 2 Date 1 1 Service Charge 3 3 Outstanding Checks 8 8 Subtotal 7 7 Adjusted Bank Balance 9 9 6 6 Outstanding Deposits Compare Adjusted Balances 10

13. © 2014 Cengage Learning. All Rights Reserved. Recording a Bank Service Charge on a Check Stub SLIDE 13 LO5 Lesson 5-2 1 1 2 2 3 3

14. © 2014 Cengage Learning. All Rights Reserved. Journalizing a Bank Service Charge SLIDE 14 Miscellaneous Expense 25.00 Cash 25.00 January 31. Received bank statement showing January bank service charge, $25.00. Memorandum No. 3. 1 1 Date 3 3 Credit 4 4 Source Document Debit 2 2 Lesson 5-2 LO5

15. © 2014 Cengage Learning. All Rights Reserved. Checks ●A check that a bank refuses to pay is called a dishonored check. ●A check dishonored by the bank because of insufficient funds in the account of the maker of the check is called a non-sufficient funds check. SLIDE 15 LO6 Lesson 5-3

16. © 2014 Cengage Learning. All Rights Reserved. Recording a Dishonored Check on a Check Stub SLIDE 16 LO6 Lesson 5-3

17. © 2014 Cengage Learning. All Rights Reserved. Journalizing a Dishonored Check SLIDE 17 August 29. Received notice from the bank of a dishonored check from Valley Landscaping, $185.00, plus $40.00 fee; total, $225.00. Memorandum No. 52. LO6 Lesson 5-3 Charge the accounts receivable the amount of the dishonored check plus the bank fee. The customer is responsible for the full amount.

18. © 2014 Cengage Learning. All Rights Reserved. Another Form of Payment ●A computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents is called electronic funds transfer (EFT). SLIDE 18 LO7 Lesson 5-3

19. © 2014 Cengage Learning. All Rights Reserved. Journalizing an Electronic Funds Transfer SLIDE 19 LO7 Lesson 5-3 June 5. Paid cash on account to Murniak Enterprises, $380.00, using EFT. Memorandum No. 18. The source document (objective evidence) is a memo.

20. © 2014 Cengage Learning. All Rights Reserved. Another form of payment ●A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder is called a debit card. SLIDE 20 LO8 Lesson 5-3

21. © 2014 Cengage Learning. All Rights Reserved. June 8. Purchased supplies, $75.00, using debit card. Memorandum No. 21. Journalizing a Debit Card Transaction SLIDE 21 LO8 Lesson 5-3 Supplies 75.00 Cash 75.00 1 1 Date 3 3 Credit 4 4 Source Document Debit 2 2 Source document for a debit card transaction is a memo.

22. © 2014 Cengage Learning. All Rights Reserved. Another Form of Cash ●An amount of cash kept on hand and used for making small payments is called petty cash. ●The petty cash fund is an asset account with a normal debit balance. SLIDE 22 Lesson 5-4 LO9

23. © 2014 Cengage Learning. All Rights Reserved. Establishing a Petty Cash Fund SLIDE 23 Lesson 5-4 LO9 Petty Cash is debited and cash is credited. Credit Debit June 8. January 19. Paid cash to establish a petty cash fund, $100.00. Check No. 8.

24. © 2014 Cengage Learning. All Rights Reserved. Making Payments from a Petty Cash Fund ●A form showing proof of a petty cash payment is called a petty cash slip. SLIDE 24 Lesson 5-4 LO9

25. © 2014 Cengage Learning. All Rights Reserved. Petty Cash Report ●A petty cash on hand amount that is less than a recorded amount is called cash short. ●A petty cash on hand amount that is more than a recorded amount is called cash over. ●Cash short requires a debit to the Cash Short and Over account. ●Cash over requires a credit to the Cash Short and Over account. ●Cash Short and Over is classified as an expense because the petty cash fund is short more times than it is over. SLIDE 25 Lesson 5-4 LO10

26. © 2014 Cengage Learning. All Rights Reserved. Petty Cash Report SLIDE 26 Recorded Amount on Hand 5 5 Total Payments 4 4 Fund Total 2 2 Subtract the actual cash on hand from the recorded amount on hand. 7 7 6 6 Actual Cash on Hand Lesson 5-4 LO10 Date and Custodian Name 1 1 Payments by General Ledger Account 3 3 Amount to Replenish 8 8

27. © 2014 Cengage Learning. All Rights Reserved. Replenishing Petty Cash ●Account title—Cash Short and Over ●Debited when cash is short ●Credited when cash is over ●Account balance ●Either a debit or credit ●Usually a debit ●Petty cash fund more likely to be short than over SLIDE 27 Lesson 5-4 LO11

28. © 2014 Cengage Learning. All Rights Reserved. Replenishing Petty Cash SLIDE 28 Lesson 5-4 January 31. Paid cash to replenish the petty cash fund, $35.00: Miscellaneous Expense, $20.00; Advertising, $14.00, Cash Short and Over, $1.00. Check No. 11. LO11 Note the accounts that are journalized. Notice that petty cash is not affected. It is the cash account that is credited.

29. © 2014 Cengage Learning. All Rights Reserved. Chapter Vocabulary Terms © 2014 Cengage Learning. All Rights Reserved. Visit Quizlet and work on the Chapter 5 vocabulary terms.Quizlet You can start with the flash cards to learn the terms, then move on to the scatter game or space race to test your knowledge. Or, you can take practice tests. Thanks for working at learning this material! Ch. 5 Vocab Test Review