Cash Control Systems

Chapter 5, Section 3

Dishonored Checks and

Electronic Banking

Dishonored Check

A check the bank refuses to pay Why would a bank refuse to pay a check?

Appears to be altered Signature does not match signature card Figures and words do not match Payment has been stopped INSUFFICIENT FUNDS (ISF)

also called nonsufficient funds (NSF)

ISF, altering or forging are ILLEGAL! Fee is charged when ISF

Recording a Dishonored Check on a Check Stub

1. Write Dishonored check $105.00 on the line under the heading “Other.”

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2. Write the total of the dishonored check in the amount column.

3. Calculate and record the new subtotal on the Subtotal line.

Journalizing a Dishonored Check

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November 29. Received notice from the bank of a dishonored check from Campus Internet Café, $70.00, plus $35.00 fee; total, $105.00. Memorandum No. 55.

2. Write the title of the account debited. Write the debit amount.

3. Write the title of the account credited. Write the amount credited.

4. Write the source document number in the Doc. No. column.

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1. Write the date.

Journalizing an Electronic Funds Transfer (EFT)

What is electronic funds transfer? Computerized cash payments system

September 2. Paid cash on account to Kelson Enterprises, $350.00, using EFT. Memorandum No. 10.

What accounts affected? How are these accounts affected? Debit? Credit? Source Document?

Journalizing an Electronic Funds Transfer (EFT)

September 2. Paid cash on account to Kelson Enterprises, $350.00, using EFT. Memorandum No. 10.

2. Write the title of the account debited. Record the amount debited.

3. Write the title of the account credited. Record the amount credited.

4. Write the source document number in the Doc. No. column.

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1. Write the date.

Journalizing a Debit Card Transaction

What is a debit card? A bank card that automatically deducts the

amount of a purchase from the checking account.

September 5. Purchased supplies, $24.00, using debit card. Memorandum No. 12.

What accounts affected? How are these accounts affected? Debit? Credit? Source Document?

Journalizing a Debit Card Transaction

September 5. Purchased supplies, $24.00, using debit card. Memorandum No. 12.

2. Write the title of the account debited. Record the amount debited.

3. Write the title of the account credited. Record the amount credited.

4. Write the source document number in the Doc. No. column.

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1. Write the date.

Assignment

Work Together 5-3 (Textbook pg. 133)

Log in to Aplia.com Application 5-3 (Textbook pg. 141) Finish Study Guide