1. Cash Control and Banking Activities
Chapter 11 $
Cash Control and Banking Activities $
Making Accounting Relevant
Businesses deposit all cash and checks into a bank account and make payments using checks. This policy helps to protect cash from loss or theft. $ $

2. Section 1 Banking Procedures (cont'd.)
Chapter 11 $
Protecting Cash
It is important to protect cash from loss, waste, theft, forgery, and embezzlement. $ $ $

3. $ $ $ $ Protecting Cash (cont'd.) Chapter 11 INTERNAL CONTROLS
Section 1 Banking Procedures (cont'd.)
Chapter 11 $
Protecting Cash (cont'd.)
INTERNAL CONTROLS $
1. Limit the number of persons handling cash.
2. Separate accounting tasks involving cash.
3. Bond (insure) employees who handle cash or cash records.
4. Use a cash register and a safe.
5. Deposit cash receipts in the bank daily.
6. Use checks to make all cash payments. $ $

4. $ $ $ $ Protecting Cash (cont'd.) Chapter 11 EXTERNAL CONTROLS
Section 1 Banking Procedures (cont'd.)
Chapter 11 $
Protecting Cash (cont'd.) $
EXTERNAL CONTROLS
1. Verify signatures on checks.
2. Maintain records of transactions. $ $

5. $ $ $ $ Opening a Checking Account Chapter 11
Section 1 Banking Procedures (cont'd.)
Chapter 11 $
Opening a Checking Account
Allows a person or business to deposit cash in a bank and to write checks against the account balance.
A signature card contains the signature(s) of the person(s) authorized to write checks on the account.
Printed checks are packaged together in checkbooks. $ $ $

6. $ $ $ $ Making Deposits to a Checking Account Chapter 11
Section 1 Banking Procedures (cont'd.)
Chapter 11 $
Making Deposits to a Checking Account
Businesses make regular deposits to protect the currency, coins, and checks received. $ $ $

7. $ $ $ $ Endorsing Checks Chapter 11
Section 1 Banking Procedures (cont'd.)
Chapter 11 $
Endorsing Checks
To deposit the check in a checking account, the depositor endorses the check to transfer ownership to the bank. An endorsement is an authorized signature written or
stamped on the
back of a check
representing a
promise to pay. $ $ $

8. Endorsing a check $ $ $ $ Endorsing Checks (continued)
A check CANNOT be cashed until its been endorsed.
To endorse a check, the payee named on the face of the check simply signs the back of the check in black/blue ink.
Must be signed in the area provided! You can’t just go crazy on the back of the check.
There are three major types of endorsements.
Blank Endorsement – just sign your name
Special Endorsement – used when you are signing over the check to a third person
Restrictive Endorsement – used to limit the use of a check. For example, you can say “for deposit only” above your signature. This means that the check cannot be cashed … only deposited.
Examples of different endorsement types: $ $ $

9. $ $ $ $ Recording Deposits in the Checkbook Chapter 11 Deposits
Section 1 Banking Procedures (cont'd.)
Chapter 11 $
Recording Deposits in the Checkbook $ $
Deposits
New Balance $

10. $ $ $ $ Writing Checks Chapter 11
Section 1 Banking Procedures (cont'd.)
Chapter 11 $
Writing Checks
Enter amount
Enter date
Enter payee $
Enter payee
Enter date
Enter purpose
Enter amount $ $
Enter new balance
Sign the check
Enter amount
Enter dollar amount in words

11. $ $ $ $ Voiding a Check Chapter 11
Section 1 Banking Procedures (cont'd.)
Chapter 11 $
Voiding a Check $
Writing the word “Void” in large letters across the front of a check (in ink) is known as voiding a check. $ $

12. $ $ $ $ Proving Cash Chapter 11 General Ledger Checkbook Cash in =
Section 2 Reconciling the Bank Account (cont'd.)
Chapter 11 $
Proving Cash $
General Ledger
Cash in
Bank account
Checkbook
Balance = $ $

13. $ $ $ $ The Bank Statement Chapter 11
Section 2 Reconciling the Bank Account (cont'd.)
Chapter 11 $
The Bank Statement
A bank statement is an itemized record of all the transactions in a depositor’s account over a given period, usually a month. $ $ $

14. $ $ $ $ The Bank Statement (cont'd.) Chapter 11
Section 2 Reconciling the Bank Account (cont'd.)
Chapter 11 $
The Bank Statement (cont'd.)
Beginning balance
Ending balance $ $ $
Checks paid by bank
(cancelled checks)
Other
deductions
Deposits into
the account

15. $ $ $ $ Reconciling a Bank Statement Chapter 11
Section 2 Reconciling the Bank Account (cont'd.)
Chapter 11 $
Reconciling a Bank Statement
Documents the differences between the bank balance and the checkbook balance. $ $ $

16. Business Transaction (cont’d.)
Section 2 Reconciling the Bank Account (cont'd.)
Chapter 11 $
Recording Bank Service Charges
A bank service charge is an expense that is recorded in the accounting records. $
Business Transaction (cont’d.)
On November 1, Roadrunner received the bank statement. A bank service charge of $8 appeared on the statement. $
JOURNAL ENTRY $