CASH CONTROL SYSTEMS

Accounting – Chapter 5

ETHICAL DECISIONS: Business Codes of Conduct

Read aloud “How Businesses Use Cash” Txtbk p. 118

Read Making Ethical Decisions: Business Codes of Conduct

Merck Code of Conduct

Activity: Read other company’s codes of conduct and compare and contrast them

5-1 Checking Accounts

Checking account: a bank account from which payments can be ordered by a depositor

Opening an account: Signature cards

DEPOSITS Txtbk p. 119

Deposit slips Vary by bank Checks are listed with their routing number

24- 108 Receive a receipt from bank w/ printed verification

Deposits are recorded on a check stub Date Amount New balance

Deposits are compiled cash receipts All journal entries for the receipts have been made

previously

ENDORSEMENTS Txtbk p. 120Endorsement – a signature or stamp on the back of

a check transferring ownership Signature should be exactly as appears in payee line Followed by official signature

Blank Endorsement – Only the endorser’s signature If lost or stolen, can be cashed by anyone in possession

Special Endorsement – Indicates a new owner of a check

“Pay to the order of” and name of new owner Can only be cashed by the person or business named

Restrictive Endorsement – limits use of the check to purpose stated

“For Deposit Only” Often a stamped endorsement

Which has most security and would most often be used in transacting business?

CHECKS Txtbk pp. 121

PreprintedNumbered

What is the benefit of having numbered checks? Help keep track of all checks to assure none are lost

or misplaced

Prepare check stub first, write check 2nd

Why? Ensures that the check information is recorded

Preparing Check Stubs & Checks Txtbk pp. 121

The check stub: Amount Date Payee Purpose Amount of check written in words Calculate new balance

The check: Date

Do not postdate Payee Amount Amount in words Purpose of check

VOIDED CHECKS Txtbk p. 122

When to void a check An error in preparing the check

How to void a check Write VOID in large letters across the check stub

and the checkRecording a voided check

In journal Date VOID in Account title Check # in Doc. No. Checkmark in Post. Ref. column Dash in Cash Credit Column

Why can’t we just throw away a voided check?

PRACTICE!

WP pp. 93, Txtbk p. 123

HOMEWORK: OYO 5-1 WP pp. 94, Txtbk p. 123

APP Problem: 5-1