Download
1 / 13
140 likes | 295 Views
This chapter provides an in-depth analysis of cash transactions, including receipts, payments, and banking procedures essential for effective accounting practices. It covers the importance of cash receipts journals, cash sales, cash payment journals, sales and purchase discounts, and the establishment and management of petty cash funds. Additionally, banking procedures such as check writing, endorsements, and bank reconciliation are thoroughly discussed. Emphasizing the significance of maintaining accurate records for auditing and efficiency, this chapter serves as a vital resource for accountants and financial professionals.
E N D
Accounting 100 Chapter 9 Cash Receipts, Cash Payments and Banking Procedures Chapter 8
Cash • Checks, money orders, funds on deposit, currency & coins • Cash Transactions: • Receipts • Payments Chapter 8
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
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
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
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
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
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
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
Petty Cash Journal Entries • Establishing the fund • Petty Cash Fund - debit • Cash - credit • Replenishing the fund • Accounts from analysis - debit • Cash - credit Chapter 8
Banking Procedures • Writing checks • Drawer, drawee, payee, negotiable • Endorsing checks • Endorsements • Blank, Full, Restrictive • Deposit Slips Chapter 8
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
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
