© 2014 Cengage Learning. All Rights Reserved. Do Now ●Independent Reading: Read text page 121, summarizing each individual paragraph ●Then bring summaries.

© 2014 Cengage Learning. All Rights Reserved.

Do Now

● Independent Reading: Read text page 121, summarizing each individual paragraph● Then bring summaries together to summarize the

whole piece in two sentences● Then answer two questions following reading● Be prepared to discuss!

SLIDE 1

Lesson 5-1

LO1


Think, Pair, Share:

● Have you ever received a check? ● What did you do with it?● What other experiences have you had

with a bank?

SLIDE 2


How Businesses Use Cash

● Most businesses make major payments by check

● Petty Cash - Small cash payments for items like postage and some supplies are made from cash fund kept at place of business

SLIDE 3

Lesson 5-1

LO1



● Issues related to cash due to frequency of transaction● Chance of recording errors● Ease of transfer without any question about

ownership● Loss as cash is moved from one place to another

SLIDE 4

Lesson 5-1

LO1



● Safety measure:● Keep cash in bank● All cash receipts placed in back for business to

have written support and evidence to support accounting records

● Compare record of checks written with bank’s record of checks paid

SLIDE 5

Lesson 5-1

LO1


Checking Account

● A business form ordering a bank to pay cash from a bank account is known as a check.

● A bank account from which payments can be ordered by a depositor is called a checking account.

● Opening a checking account● Signature card – signature of check signers● Deposit slip

SLIDE 6

LO1

Lesson 5-1


What Comes with a Checking Account

● Checkbook● Checks● Check register

SLIDE 7


Deposit Slips

● Checks listed on deposit slip according to bank routing number on each check● Identifies bank on which check is written

● Banks give depositors receipts when deposit is made● Can include copy of deposit slip● Printed verification printed along top page of deposit slip● Initials are those of bank employee who accepted deposit

● Cash receipts journalized at time cash is received● Later, cash receipts are deposited in checking account, so

no journal entry is needed for deposits

SLIDE 8

LO2

Lesson 5-1


Depositing Cash● A bank form which lists the checks, currency, and coins an account

holder is adding to the bank account is called a deposit slip.● Bank customer prepares this each time cash or checks are deposited in

bank account● May differ slightly from one bank to another

SLIDE 9

LO1

Lesson 5-1


Deposit Recorded on a Check Stub

SLIDE 10

LO1

Lesson 5-1

1. Write balance brought forward on the check stub.2. Write the date of the deposit on the stub.3. Write the amount of the deposit on the stub.

1

4. Calculate the subtotal.

2 34


Checking Accounts Today

● Managing a checking account

● https://www.youtube.com/watch?v=IaAJNFyf9fw

● Why do we use checking accounts? What are the benefits?

SLIDE 11

https://www.youtube.com/watch?v=IaAJNFyf9fw

https://www.youtube.com/watch?v=IaAJNFyf9fw


Endorsement

● A signature or stamp on the back of a check transferring ownership is called an endorsement.

● Three types of commonly used endorsements● Blank endorsement● Special endorsement● Restrictive endorsement

SLIDE 12

LO2

Lesson 5-1


Blank Endorsement

● An endorsement consisting only of the endorser’s signature is called a blank endorsement.

● Indicates subsequent owner is whoever has check● Can be cashed by anyone in

possession

SLIDE 13

LO2

Lesson 5-1


Special Endorsement

● An endorsement indicating a new owner of a check is called a special endorsement. ● A special endorsement is sometimes known as an

endorsement in full.● “Pay to order of”● Original owner signs underneath

SLIDE 14

LO2

Lesson 5-1


Restrictive Endorsement

● An endorsement restricting further transfer of a check’s ownership is called a restrictive endorsement.

● Many businesses stamp check with restrictive endorsement to prevent others from cashing

SLIDE 15

LO2

Lesson 5-1


Completed Check Stub and Check

● Consecutive numbers on checks provide easy way of identifying each check● Also ensures none are lost or misplaced

● Check stub is business’s record of each check written for cash payment transaction

● PREPARED BEFORE CHECK IS WRITTEN

SLIDE 16

LO3

Lesson 5-1



SLIDE 17

LO3

Lesson 5-1

1. Write the amount of the check on the stub.

4. Record the purpose of the check on the stub.

2. Write the date of the check on the stub.3. Write to whom the check is to be paid on the stub.

5. Write the amount of the check on the stub.

5

4

21

3

6. Calculate the new checking account balance and record the new balance.

6



SLIDE 18

LO3

Lesson 5-1

7. Write the date the check is issued.

10. Write the amount in words.

8. Write to whom the check is to be paid.9. Write the amount in figures.

11. Write the purpose of the check.

11

108

7

9

12. Sign the check.

12


Recording a Voided Check

● Banks usually refuse to accept altered checks, so new checks should be prepared if an error occurs

● All checks not used due to error should be retained for records

● Check that cannot be processed because maker has made it invalid is a voided check.● VOID written in large letters across check stub and

check

SLIDE 19

LO3

Lesson 5-1


1. Record the date in the Date column.

Recording a Voided Check

SLIDE 20

LO3

Lesson 5-1

1 2 3 4

3. Write the check number in the Doc. No. column.2. Write the word VOID in the Account Title column.

4. Place a check mark in the Post. Ref. column.5. Place a dash in both the Debit and Credit columns.

5


Lesson 5-1 Audit Your Understanding

1. List the three types of endorsements.

SLIDE 21

ANSWER

Blank endorsementSpecial endorsementRestrictive endorsement

Lesson 5-1



2. List the steps for preparing a check stub.

SLIDE 22

ANSWER1. Write the amount of the check after the dollar sign at the

top of the stub. 2. Write the date of the check on the Date line. 3. Write to whom the check is to be paid on the To line. 4. Record the purpose of the check on the For line. 5. Write the amount of the check after the words Amt. This

Check. 6. Calculate the new checking account balance and record it in

the amount column on the last line of the stub.

Lesson 5-1



3. List the steps for preparing a check.

SLIDE 23

ANSWER1. Write the date. 2. Write to whom the check is to be paid following the

words Pay to the order of. 3. Write the amount in figures following the dollar sign. 4. Write the amount in words and draw a line through

the unused space up to the word Dollars. 5. Write the purpose of the check on the line labeled For. 6. Sign the check.

Lesson 5-1


3 Corners: Which Type of Endorsement and Purpose

SLIDE 24

© 2014 Cengage Learning. All Rights Reserved. SLIDE 25


© 2014 Cengage Learning. All Rights Reserved. SLIDE 26


© 2014 Cengage Learning. All Rights Reserved. Do Now ●Independent Reading: Read text page 121, summarizing each individual paragraph ●Then bring summaries.

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