1. (American Banking Association)
Lesson 6-1 (GJ)
DEPOSITING CASH
ABA #
(American Banking Association)
City #
Bank #
Federal ID #
Lesson 6-1, page 120

2. DEPOSIT RECORDED ON A CHECK STUB
What I had before this check
What I deposited in the bank
What is available to spend before any “other” changes
What is available to spend
What I am spending now
What I will have left
Lesson 6-1, page 120

3. CHECK STUB EXAMPLE From Check #77 No “Other” changes, so

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

5. BLANK ENDORSEMENT, SPECIAL ENDORSEMENT, AND RESTRICTIVE ENDORSEMENT
(“special instructions”)
Restrictive Endorsement
(ONLY for deposit)
Lesson 6-1, page 121

6. RECORDING A VOIDED CHECK
4. Place a check mark in the Post. Ref. column. 4
C19
3. Write the check number. 3
2. Write the word VOID in the account title. 2
1. Record the date. 1
5. Place a dash in both the Debit and Credit columns. 5
Lesson 6-1, page 123

7. WT

8. Lesson 6-1 (GJ)
BANK STATEMENT
Lesson 6-2, page 125

9. BANK STATEMENT RECONCILIATION1
1. Date
DEDUCT OUTSTANDING CHECKS: 2
2. Check Stub Balance
5. Bank Balance Statement 5 3
3. Service Charge
6. Outstanding Deposits 6 4
4. Adjusted Check Stub Balance 7
7. Subtotal 8
8. Outstanding Checks 9
9. Adjusted Bank Balance
10. Compare Adjusted Balances 10
Now you know that your records match the bank’s records.
So sleep well.
(bank knows, but your records don’t)
(you know but bank records don’t)
Lesson 6-2, page 126

10. RECORDING A BANK SERVICE CHARGE ON A CHECK STUB1
1. Write Service Charge. 2
2. Write the amount of the service charge. 3
3. Calculate and record the new subtotal.
**Gets Journalized as a Miscellaneous Expense
Lesson 6-2, page 127

11. WT

12. it becomes an EXPENSE to the business
What happens when MY bank won’t cash a check from a customer because THEIR account doesn’t have enough money to “cover” the check?
Our bank will not “Honor” it…
…it becomes a “Dishonored Check”
Other reasons a bank might dishonor a check:
Check was altered
Signature doesn’t match signature card
Figures and words don’t agree
The check is post-dated
The issuer has placed a “stop payment” on the check
We’ll try to get the money again, but oftentimes it cannot be recovered –
it becomes an EXPENSE to the business
Lesson 6-3, page 130

13. 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.
Objective Evidence requires us to create a Memo
1. Which accounts are affected?
Accounts Receivable—Learn N Play
Cash
4. How is each amount entered in the accounts?
Assets increase on the debit side.
Assets decrease on the credit side.
3. How is each classification changed?
Assets are increased.
Assets are decreased.
2. How is each account classified?
Accounts Receivable—Learn N Play is an asset account.
Cash is an asset account.
Accounts Rec.—Learn N Play
Debit
Normal Balance 
50.00
Lesson 6-3, page 131

14. RECORDING A DISHONORED CHECK ON A CHECK STUB
Lesson 6-1 (GJ)
RECORDING A DISHONORED CHECK ON A CHECK STUB
When we got the check, we recorded it as receiving cash.
We have to adjust our checking account to show that we didn’t actually receive it.
aaand…We have to tell our journal:
1 – Cash isn’t there
2 – That person still owes us the moolah!! 1
1. Write Dishonored Check $50.00. 2
2. Write the amount of the dishonored check. 3
3. Calculate and record the new subtotal.
Lesson 6-3, page 130

15. Electronic Funds Transfer (EFT) & Debit Cards (MAC Cards)
The journal entries for making payments on account
through EFT and the use of a debit card
is the same as when a check is written
…EXCEPT for the source document
…because there are no checks (C5)
Objective Evidence requires that we create…
A MEMO
Both EFT & MAC payments get recorded on the check stub
as “other” to keep our balances up to date
Lesson 6-3, pages

16. ESTABLISHING A PETTY CASH FUND
Petty cash – an amount of cash kept on hand and used for
making small payments; writing a check is not time or
cost effective
Do Girl Scouts take checks for cookies??
Stamps
Printer Ink
Lunch
Encore Music has a petty cash fund of $200.00
…with no one payment for more than $20.00
Lesson 6-4, page 135

17. ESTABLISHING A PETTY CASH FUND
Lesson 6-1 (GJ)
ESTABLISHING A PETTY CASH FUND
August 17. Paid cash to establish a petty cash fund, $ Check No. 8.
$20 max at one time
Cash
Petty Cash
1. Which accounts are affected?
Petty Cash
Cash
4. How is each amount entered in the accounts?
Assets increase on the debit side.
Assets decrease on the credit side.
3. How is each classification changed?
Assets are increased.
Assets are decreased.
2. How is each account classified?
Petty Cash is an asset account.
Cash is an asset account.
Debit
Normal Balance 
200.00
Lesson 6-4, page 135

18. MAKING PAYMENTS FROM A PETTY CASH FUND WITH A PETTY CASH SLIP
Slips are kept in the petty cash box until the fund is replenished
Lesson 6-4, page 136

19. MAKING PAYMENTS FROM A PETTY CASH FUND WITH A PETTY CASH SLIP
$58
$57
$40
$10
Spent $165
Do I have $200 in the box so that I am ready for next month?
How much do I have left?
Lesson 6-4, page 136

20. REPLENISHING PETTY CASH
“Replenishing” means bringing the amount back up to $200.00
Encore Music replenishes whenever the cash is reduced to $75.00
Always replenish at the end of the month
…record transactions WHEN they occur (MEWR)
$35
$200
**Notice that “Petty Cash” is not Debited or Credited**
Lesson 6-4, page 137

21. “Petty Cash” is ONLY affected when you are ESTABLISHING the petty cash fund initially, or when you are adjusting the amount that is needed to be kept in the petty cash box!!
Lesson 6-4, page 137

22. CHECK FIGURES FOR SELECTED APPLICATIONS
6-1
Endorse the checks (sign your own name)
Complete each check and check stub
Balance carried forward on last check stub should be
6-2
Reconcile the bank statement
Update the “Other” section of check stub 312
Do not fill out the top (check #312 info part)
JUST calculate the final subtotal for this check
– matches your bank reconciliation now!
Journalize the bank service charge (What kind of expense is that?)
6-4
Establish petty cash
Replenish petty cash – TOTAL
6-5
Journalize all entries