© 2014 cengage learning. all rights reserved. do now ●if you have a checking account, do you keep...
TRANSCRIPT
© 2014 Cengage Learning. All Rights Reserved.
Do Now
● If you have a checking account, do you keep records in your checkbook, or do you rely on online banking?● Have you ever come across an error, either in your
own records or the bank’s? What did/would you do?
● If you don’t have your own checking account, when will you be likely to open your own? Why?
SLIDE 1
© 2014 Cengage Learning. All Rights Reserved.
Independent Reading:● Read “shopping for a checking account” on
page 131 of the text● Answer questions one and two only
SLIDE 2
© 2014 Cengage Learning. All Rights Reserved.
Bank Statement
SLIDE 3
LO4
Lesson 5-2
● A report of deposits, withdrawals, and bank balances sent to a depositor by a bank is called a bank statement.
● When bank receives check, amount of each check is deducted from depositor’s account
● A check which has been paid by the bank is called a canceled check.
● Stamp ensues● Returned to depositor or kept by
bank
© 2014 Cengage Learning. All Rights Reserved.
Pair & Share
● What would be reasons for a bank statement account balance being different than your personal records of your account balance?
SLIDE 4
© 2014 Cengage Learning. All Rights Reserved.
Reasons for Differences between Bank and Depositor
1. Service charge may not have been recorded in depositor’s business records
2. Outstanding deposits may be recorded in depositor’s records but not on a bank account
3. Outstanding check may be recorded in the depositor’s records but not on a bank statement
4. Depositor may have made math or reading errors
SLIDE 5
© 2014 Cengage Learning. All Rights Reserved.
Reconciliations
● Verifying information on bank statement and checkbook are in agreement
● Reconciling immediately is important part of cash control
● Check mark placed on check stub of each canceled check on bank statement
● Check stub with check mark is canceled check● Outstanding checks and deposits are those issued
and made without bank recognizing them on statement yet
SLIDE 6
© 2014 Cengage Learning. All Rights Reserved.
Bank Statement Reconciliation
SLIDE 7
LO4
Lesson 5-2
BankStatementBalance
5
Adjusted Check Stub Balance4
Check Stub Balance2 Date1
ServiceCharge 3
OutstandingChecks8
Subtotal7
AdjustedBank Balance9
6 OutstandingDeposits
Compare Adjusted Balances10
© 2014 Cengage Learning. All Rights Reserved.
As a Class
● Work Together 5-1, Part I
SLIDE 8
© 2014 Cengage Learning. All Rights Reserved.
Recording a Bank Service Charge on a Check Stub
SLIDE 9
LO5
Lesson 5-2
1. Write Service Charge on the check stub under the heading Other.
1
2
3
3. Calculate and record the new subtotal on the Subtotal line.
2. Write the amount of the service charge in the amount column.
© 2014 Cengage Learning. All Rights Reserved.
Journalizing a Bank Service Charge
SLIDE 10
25.00Miscellaneous Expense
Cash
25.00
January 31. Received bank statement showing January bank service charge, $25.00. Memorandum No. 3.
2. Write the title of the account to be debited in the Account Title column. Record the amount debited in the Debit column.
1. Write the date in the Date column.
3. On the next line, indented, write the title of the amount credited in the Account Title column. Write the credit amount in the Credit column.
4. Write the source document number in the Doc. No. column.
1 Date 4 Source DocumentDebit2
Lesson 5-2
LO5
3 Credit
© 2014 Cengage Learning. All Rights Reserved.
As a Class
● Work Together 5-1, Parts II & III
SLIDE 11
© 2014 Cengage Learning. All Rights Reserved.
Lesson 5-2 Audit Your Understanding
1. List four reasons why a depositor’s records and a bank’s records may differ.
SLIDE 12
ANSWER1. A service charge may not have been recorded in the
depositor’s business records. 2. Outstanding deposits may be recorded in the depositor’s
records but not on a bank statement. 3. Outstanding checks may be recorded in the depositor’s
records but not on a bank statement. 4. A depositor may have made a math or recording error.
Lesson 5-2
© 2014 Cengage Learning. All Rights Reserved.
Lesson 5-2 Audit Your Understanding
2. If a check mark is placed on the check stub of each canceled check, what does a check stub with no check mark indicate?
SLIDE 13
ANSWER
An outstanding check
Lesson 5-2
© 2014 Cengage Learning. All Rights Reserved.
Bank Reconciliation Process
● Form two groups of five to create a flow chart illustrating the bank reconciliation process (textbooks may be used as resource)● Put these in correct order with your groups:
● Journalizing bank service charge● Canceled checks
● Bank statement● Outstanding checks● Recorded deposits
● Reconciliation● Cash balance from check stub● Outstanding deposits
● Service charges on check stub● Service charge
SLIDE 14
© 2014 Cengage Learning. All Rights Reserved.
Closure
● Why must service charges be recorded on both the next unused check stub and the general journal?
SLIDE 15