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Accounting 100

Accounting 100. Chapter 9 Cash Receipts, Cash Payments and Banking Procedures. Cash. Checks, money orders, funds on deposit, currency & coins Cash Transactions: Receipts Payments . Cash Receipts Journal. Used for transactions with a cash debit Eliminates repetitive posting

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Accounting 100

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  1. Accounting 100 Chapter 9 Cash Receipts, Cash Payments and Banking Procedures Chapter 8

  2. Cash • Checks, money orders, funds on deposit, currency & coins • Cash Transactions: • Receipts • Payments Chapter 8

  3. Cash Receipts Journal • Used for transactions with a cash debit • Eliminates repetitive posting • Individual postings to the subsidiary ledger • Summary postings to the General Ledger • Saves time, effort, and recording space • Permits division of labor • Strengthens audit trail by grouping transactions Chapter 8

  4. Cash Sales • Cash Register Proof • Receipt for each cash sales • Checked each day with the cash proceeds • Journal entry to record the cash sales: • Cash debit • Sales Tax Payable credit • Sales credit Chapter 8

  5. Cash Short or Over • Cash Short • Less cash in the register than shown on tape. • Debit balance - classify as an expense • Cash Over • More cash in the register than shown on tape. • Credit balance - classify as revenue Chapter 8

  6. Cash Payments Journal • Used for transactions with a cash credit • Eliminates repetitive posting • Individual postings to subsidiary ledger • Summary postings to the general ledger • Saves time, effort, and recording space • Strengthens audit trail by grouping transactions • Permits division of labor Chapter 8

  7. Sales Discounts • Contra revenue account • Debit balance • Offered primarily by wholesalers • Encourages prompt payment by offering cash discounts on invoice balance. • Accounts Receivable/Customer - debit • Sales Discount - debit • Sales Tax Payable - credit • Sales - credit Chapter 8

  8. Purchases Discount • Contra expense account • Credit balance • Offered primarily by wholesalers • Encourages prompt payment by offering cash discounts on invoice balance. • Purchases - debit • Purchases Discount - credit • Accounts Payable/Supplier - credit Chapter 8

  9. Petty Cash Fund • Used for miscellaneous cash payments • Petty Cash Analysis Sheet • Establishing the fund - one-time entry • Replenishing the fund - entry made regularly • Recording petty cash transactions • Vouchers used to make payments from fund. Chapter 8

  10. Petty Cash Journal Entries • Establishing the fund • Petty Cash Fund - debit • Cash - credit • Replenishing the fund • Accounts from analysis - debit • Cash - credit Chapter 8

  11. Banking Procedures • Writing checks • Drawer, drawee, payee, negotiable • Endorsing checks • Endorsements • Blank, Full, Restrictive • Deposit Slips Chapter 8

  12. Bank Reconciliation • Comparison of Bank Statement & Checkbook or Cash Account Balance • Canceled checks • paid checks vs. outstanding checks • recorded deposits vs. outstanding deposits • Credit or Debit Memorandums • Additions or subtractions to account Chapter 8

  13. Bank ReconciliationJournal Entries • NSF checks • Accounts Receivable/Customer - debit • Cash - credit • Bank Service Charges • Miscellaneous Expense - debit • Cash - credit • Statement Errors • Dependent on type of error made. Chapter 8

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