Basic Accounting 2

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Objectives for today’s lesson

Introduction to Basic Accounting 2

Introduction to banking procedures

Paying into the bank

Making Payments

Important dates

We will have a mock exam on Monday 14th February from 1pm until 3pm

The real exam will be the week after half term on Monday 28th February 1pm until 3pm

As you have now all received your text books and work books, please remember to bring them with you to each lesson as photocopies of the chapters won’t be available

We will be looking at the following topics over the next few weeks

Banking procedures Receiving and recording payments Entering transactions into the cash book and

petty cash book Bank reconciliation statements Control accounts in more detail The trial balance and the correction of errors The journal

What are Banks and Building Societies?

A bank is a limited company, owned by stakeholders. For example Barclays, HSBC, RBS and Lloyds TSB

A building society is a ‘mutual’ organisation owned by its members (customer’s) For example Nationwide and the Yorkshire Building Society

Banks and Building Societies in the UK

You now have fifteen minutes in pairs to research on the internet the following things:

What services do banks offer?

What services do building societies offer?

Can you see any differences between the services they offer?

Cash - See page 7 of the text book

Cheques – turn to page 9 of the text book

In groups, you have five minutes to think of as many different payment types as can you think of.

Incoming payments

Cash, cheques, credit and debit cards transactions and bank transfers (e.g. BACS) are all methods of payments

In business, if someone pays you by cash you will need to know how much change to give. Sometimes the amount of change to be given is detailed on a receipt.

Activity Using the receipts I asked you to bring with you

to the lesson today, you now have five minutes in your pairs to create a list of the information often shown on a receipt

What is a float?

An amount of money you start off with in your till or cash box at the beginning of the day

For example if someone bought an item costing £1 but they only had a £20 note you would have plenty of change in your float to be able to give them the £19 change and not have to turn customers away due to lack of change

When handling cash you need to think about security.

What action can you take to avoid becoming the victim of crime?

Example of completed cheque

When receiving a cheque what information on When receiving a cheque what information on the cheque should you ensure is correct?the cheque should you ensure is correct?

Dishonoured cheques

Now lets have a look at pages 26 and 27 of the text book

We will then have a go at a practice question

Card Payments

Chip and PIN

the payment is processed through EFTPOS (Electronic Funds at Point of Sale)

Recording money received

Cash tills – Cash put in a till will be recorded either electronically or by some kind of till roll. The details of the days transactions will be reconciled against the physical cash in the till.

If there is a difference between the cash in the till and the end of day report, why might this be?

Remittance advice lists

All payments or notification of payments that are received through the post are recorded on a remittance list (see page 33)

All remittance lists will be signed by the person opening the mail

Details from the remittance list we then be recorded in the cash book

Now have a go at chapter 2 tutorial practice questions and then chapter 2 work book questions