Cash Control Systems Mrs. Largo Chapter 6

Depositing Cash CHECK CHECKING ACCOUNT OPENING AN ACCOUNT Business form ordering a bank to pay cash from a bank account CHECKING ACCOUNT Bank account from which payments can be ordered by a depositor OPENING AN ACCOUNT Signature cards

Deposit Slips May differ from bank to bank Contains basic information Receipt or verification stamp provided

Deposits Recorded on Check Stub Cash receipts journalized when received LATER, cash receipts are deposited into checking account Therefore, no journal entry is needed for deposits because cash receipts have already been journalized.

Endorsements Risky Endorsement in full/Third party Restricts further transfer Pay to the order of A signature or stamp on the back of a check transferring ownership is called an endorsement. MUST be endorsed exactly as the person’s name appears on the front of the check.

Completed Check Stub and Check Numerically preprinted checks with stubs, To avoid forgetting to prepare a check stub, complete the check stub before writing the check! Notice each part that is completed.

Recording a Voided Check Banks usually refuse altered checks. Any mistakes should warrant a voided check. Because checks are prenumbered, voided checks should be recorded. Write VOID across check and journalize as follows:

Check Your Understanding What are the three types of endorsements? Which is the most risky? Which comes first, journalizing cash receipts or recording receipts on the check stub? What is required when opening a checking account?

Please turn to: 6-1 Working Together BOOKS - p. 124 WORKBOOKS – p. 93 Let’s Practice Please turn to: 6-1 Working Together BOOKS - p. 124 WORKBOOKS – p. 93