1. Chapter 5, Section 1 Checking Accounts
Cash Control Systems
Chapter 5, Section 1
Checking Accounts

2. How Businesses Use Cash
Cash transactions occur most frequently.
Cash is easily transferred.
Good cash control system is crucial!
Businesses use a checking account so they have a written record.

3. Depositing Cash Complete a deposit slip
Checks listed in order of bank routing number

4. Deposit Recorded on a Check Stub

5. Endorsing Checks
Endorsement – Signature or stamp on back of check transferring ownership
Confined to limited amount of space
Should be signed exactly as the person’s name appears on the front of the check
Endorsement is a signature of stamp on the back of a check transferring ownership.
Should be endorsed exactly as the name appears on the check.
Should be written in ink and in the space indicated.
Blank Endorsement is most common.
Restrictive Endorsement should be used if mailing a deposit or if endorsing a check before going to the bank.

6. Types of Endorsements Blank Endorsement Special Endorsement
Endorser’s signature only
Special Endorsement
Indicates new owner of a check
Restrictive Endorsement
Restricts further transfer of ownership

7. When a Business Pays Cash
Two parts: check stub and check
Check stub is always completed first
Check stub is the bank’s record of each check written (CONCEPT: Objective Evidence)

8. Preparing a Check Stub 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. 5
6. Calculate the new checking account balance. 6

9. Preparing a Check 7. Write the date. 10. Write the amount in words.8 9 10 11 12
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.

10. Voided Checks
What do you do if you make a major error when writing a check?
Write “VOID” on stub and check then file.
Record an entry in the journal.

11. Assignment Work Together (Textbook pg. 123) Log in to Aplia.com
Application 5-1 (Textbook pg. 140)
Chapter 5 Study Guide