1. Chapter 6
Cash Control System

2. Vocabulary
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 – An endorsement consisting only of the endorser’s signature

3. Vocabulary Continued
Special endorsement – An endorsement indicating a new owner of the check.
Restrictive Endorsement – An endorsement restricting further transfer of a check’s ownership.
Postdated Check – A check with a future date on it.

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

5. DEPOSITING CASH
Lesson 6-1, page 126

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

7. COMPLETED CHECK STUB AND CHECK1 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

8. 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

9. 6-1 Work together and on your own

10. BANK STATEMENT
Lesson 6-2, page 131

11. Vocabulary
Bank Statement – A report of deposits, withdrawals, and bank balances sent to a depositor by a bank.

12. Differences between bank balance and bank statement balance occur
A service charge may not have been recorded in the depositor’s business records.
Outstanding deposits may be recorded in the depositor’s records but not a bank statement.
Outstanding checks may be recorded in the depositor’s records but not on a bank statement.
A depositor may have made math or recording errors.

13. 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

14. 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

15. JOURNALIZING A BANK SERVICE CHARGE1 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

16. 6-2 Work together and on your own

17. Vocabulary Dishonored Check – A check that a bank refuses to pay.
Electronic Funds Transfer (EFT) – A computerized cash payments system that uses electronic funds transfer to pay vendors

18. 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

19. Reasons a Check may be Dishonored
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.
The account of the person who wrote the check has insufficient funds to pay the check.

20. 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, $ Memorandum No. 55.
1. Which accounts are affected?Accounts Rec-Learn N Play & Cash
Cash
Accounts Rec.—Learn N Play
Debit
Normal Balance
2. How is each account classified?
Accounts Rec-Learn N Play/ asset account.Cash/ account.
50.00 
3. How is each classification changed? Assets are increased. Assets are decreased.
Debit
Normal Balance
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

21. JOURNALIZING A DISHONORED CHECK4 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

22. JOURNALIZING AN ELECTRONIC FUNDS TRANSFER4 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

23. 6-3 work together and on your own

24. Vocabulary
Petty Cash – An amount of cash kept on hand and used for making small payments.
Petty Cash Slip – A form showing proof of petty cash payment.

25. ESTABLISHING A PETTY CASH FUND
August 17. Paid cash to establish a petty cash fund, $ Check No. 8.
1. Which accounts are affected?
Petty Cash & Cash
Cash
Petty Cash
Debit
Normal Balance
2. How is each account classified? Petty Cash/ asset account. Cash/asset account.
200.00 
3. How is each classification changed? Assets are increased.
Assets are decreased.
Debit
Normal Balance
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

26. ESTABLISHING A PETTY CASH FUND4 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

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

28. REPLENISHING PETTY CASH4 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