FABM

LESSON 6 – ACCOUNTING BOOKS, JOURNAL, AND LEDGER.

REVIEW FOR G11 LESSON!!

Sales journal – record sales on account

Purchases Journal – record purchases of inventory on account.

Cash Receipts Journal – record all transactions involving receipts of cash.

Cash Disbursements Journal – record all transactions involving payments of cash.

LESSON 7 – BASIC DOCUMENTS AND TRANSACTIONS RELATED TO BANK DEPOSITS

Bank Account

-        funds entrusted by a depositor to a bank for safekeeping.

Types of Bank Accounts

1.      Saving Account

2.      Current or Checking account.

3.      Time deposit

Savings Account

-        earns modest interest rate.

-        intended to encourage savings.

-        normally evidenced by a “passbook”.

-        automatic teller machine (ATM) card.

Current or Checking Account

-        The depositor can write checks.

-        it can be either.

a.)    Basic Checking Account – usually does not pay interest.

b.)    Interest-Bearing Checking Account – pays interest just like a savings account.

-        instead of a passbook, the depositor receives a “checkbook.”

-        the bank issues a “bank statement” to the depositor every month.

Time Deposit (or Certificate of Deposit or Term Deposit)

-        interest-bearing fund maintained at a bank for a fixed period (e.g., 30 days, 60 days, 90 days, etc.)

-        denominated in fixed amounts, and normally, cannot be withdrawn until its maturity date.

-        evidenced by a “Certificate of Time Deposit”

Deposits and Withdrawals

-        making deposits/withdrawals from banks are often than not “paperless”.

-        you can withdraw from an atm or your phone.

-        however, there’s still some bank that uses “withdrawal slips”.

Preparation of Checks

Check

-        an instrument that orders a bank (drawee) to pay the person named on the check or the bearer thereof (payee).

Parties in check

1.      Drawer – the one writing the check and signatures.

2.      Payee – the one who is named on the check.

3.      Drawee – the bank.

Other parts of a check:

1.      Date – normally a check is dated as of the date it was written.

o   Antedated check – earlier date

o   Postdated check – later date

o   Stale check – check has not been encashed for 6 months.

2.      Amount in numbers and Amount in words.

3.      Signature – partnership, corporations, or cooperatives (2 signatures) sole proprietors (1 signature).

Bank Statement

-        report issued by the bank.