Cash Control Systems

Mrs. LargoChapter 6

Depositing Cash

• CHECK– 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

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.

Risky Endorsement in full/Third party Restricts further transfer

Pay to the order of

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?

Let’s Practice

Please turn to:6-1 Working Together

BOOKS - p. 124WORKBOOKS – p. 93