Cash
6542– SRI HANDAYANI, SE, MM, MAk, CPMA
PROGRAM STUDI MANAJEMEN & AKUNTANSI FAKULTAS EKONOMI DAN BISNIS
UNIVERSITAS ESA UNGGUL FEB103
PENGANTAR AKUNTANSI I +
LAB
Mahasiswa mampu memahami
Akuntansi Kas, dan menganalisis
transaksi Kas Kecil
TKT306 - Perancangan Tata Letak Fasilitas 6623 - Taufqur Rachman 2
Chapter
7
Cash
Accounting, 21st Edition
Warren Reeve Fess
PowerPoint Presentation by Douglas Cloud
Professor Emeritus of Accounting Pepperdine University
© Copyright 2004 South-Western, a division of Thomson Learning. All rights reserved.
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1. Describe the nature of cash and the
importance of internal control over cash. 2. Summarize basic procedures for
achieving internal control over cash receipts.
3. Summarize basic procedures for
achieving internal control over cash
payments, including the use of a voucher system.
4. Describe the nature of a bank account and its use in controlling cash.
Objectives
Objectives
After studying this
chapter, you should
be able to:
After studying this
chapter, you should
5. Prepare a bank reconciliation and journalize any necessary entries.
6. Account for small cash transactions using a petty cash fund.
7. Summarize how cash is presented on the balance sheet.
8. Compute and interpret the ratio of cash to current liabilities.
Objectives
Control Over Cash
Many companies need several cash accounts to account for different cash categories and funds. Most companies have multiple bank accounts.
The title for each bank account should be:
Cash in Bank—(Name of Bank)
Preventive controls protect cash from theft and misuse of cash.
Retailers’ Sources of Cash
Retailers’ Sources of Cash
Cash Receipts
CASHIER’S DEPARTMEN
T
ACCOUNTIN GDEPARTME
NT
Register records
Mail Receipts
1
ACCOUNTIN GDEPARTME
NT
Deposit ticket
Bank
CASHIER’S DEPARTMEN
T
Deposit receipt
Retailers’ Sources of Cash
Controlling Cash Received
from Cash Sales
Controlling Cash Received
from Cash Sales
19 Cash 3 142 00
Cash Short and Over 8 00
To record cash sales and actual cash on hand.
Sales 3 150 00
Cash sales for March 19 totaled $3,150.00 per the cash register tape. After removing the change fund, only $3,142.00 was on hand.
Controlling Cash Received
in the Mail
Controlling Cash Received
in the Mail
Most companies’ invoices
are designed so that
customers return a portion
of the invoice, call a
remittance advice.
Most companies’ invoices
are designed so that
customers return a portion
of the invoice, call a
Controlling Cash Received
in the Mail
Controlling Cash Received
in the Mail
1. The employee who opens the mail should initially
compare the amount received with the amount on the remittance advice.
2. The employee opening the mail stamps checks and
money orders “For Deposit Only” in the bank account of the business.
3. All cash is sent to the Cashier’s Department where
Controlling Cash Received
in the Mail
Controlling Cash Received
in the Mail
4. The remittance advices and their summary totals are
delivered to the Accounting Department where a clerk prepares the records of the transactions and posts them to the customer account.
5. The stamped duplicate copy of the deposit ticket is
1.
Cash controls must provide assurance that payments are made for only authorizedtransactions.
2. Cash controls should ensure that cash is used
efficiently.
3. A voucher system provides assurance that what is being paid for was properly ordered, received, and billed by the supplier.
A voucher system is a set of
procedures for authorizing
and recording liabilities and
cash payments.
A voucher system is a set of
procedures for authorizing
and recording liabilities and
cash payments.
Basic
Features of
the Voucher
System
Basic Features of the Voucher
System
Basic Features of the Voucher
System
A voucher system normally uses vouchers.
The system normally has a fle for unpaid
vouchers and a fle for paid vouchers.
Usually prepared by the Accounting
Department after all necessary supporting documents are received (purchase order, supplier’s invoice, and a receiving report).
In preparing the voucher, the accounts
payable clerk verifes the quantity, price, and mathematical accuracy of the supporting
A summary received from
the bank of all account
transaction is called a
statement of account.
A summary received from
the bank of all account
transaction is called a
A bank reconciliation is a listing
of the items and amounts that
cause the cash balance reported
in the bank statement to differ
from the balance of the cash
account in the ledger.
A
bank reconciliation
is a listing
of the items and amounts that
cause the cash balance reported
in the bank statement to differ
from the balance of the cash
Reasons for Differences Between Depositor’s
Records and the Bank Statement
Reasons for Differences Between Depositor’s
Records and the Bank Statement
Outstanding checks
Deposits in transit
Service charges
Collections
Not-sufcient-funds
(NSF) checks
Errors
Outstanding checks
Deposits in transit
Service charges
Collections
Not-sufcient-funds
(NSF) checks
Steps in a Bank Reconciliation
Steps in a Bank Reconciliation
1. Compare each deposit listed on the bank statement
with unrecorded deposits appearing on the preceding period’s reconciliation and with deposit receipts.
2. Compare paid checks with outstanding checks
appearing on the preceding period’s reconciliation and with recorded checks.
Add deposits not recorded by the bank to the
balance according to the bank statement.
Add deposits not recorded by the bank to the
balance according to the bank statement.
Deduct checks outstanding that have been paid
by the bank from the balance according to the
bank statement.
Deduct checks outstanding that have been paid
by the bank from the balance according to the
bank statement.
3. Compare bank credit memorandums to entries in the
journal.
Add credit memorandums that have not been
recorded to the balance according to the
depositor’s records.
Add credit memorandums that have not been
recorded to the balance according to the
Steps in a Bank Reconciliation
Steps in a Bank Reconciliation
4. Compare bank debit memorandums to entries
recording cash payments.
5. List any errors discovered during the preceding steps.
Deduct debit memorandums that have not been
recorded from the balance according to the
depositor’s records.
Deduct debit memorandums that have not been
recorded from the balance according to the
BANK
Bank’s
books
Beginning balance $3,359.78
Depositor’s
records
Beginning balance $2,549.99
Power Network prepares to reconcile the
monthly bank statement as of July 31, 2006
A deposit of $816.20 did not
appear on the bank statement.
A deposit of $816.20 did not
appear on the bank statement.
BANK
Bank’s
books
Beginning balance $3,359.78
Add deposit not
recorded by bank
816.20 $4,175.9
8
Depositor’s
records
BANK
Bank’s
books
Beginning balance $3,359.78 Add deposit not
recorded by bank 816.20
$4,175.9 8
Depositor’s
records
Beginning balance $2,549.99
Add note and interest
collected by bank
408.00 $2,957.9
9
The bank collected a note in the
amount of $400 and the related
interest of $8 for Power Networking
A deposit of $637.02 did not appear on the bank statement.
A deposit of $637.02 did not appear on the bank statement.
Three checks that were written during the
period did not appear on the bank statement:
#812, $1,061; #878, $435.39, #883, $48.60.
Three checks that were written during the
period did not appear on the bank statement:
#812, $1,061; #878, $435.39, #883, $48.60.
BANK
Bank’s
books
Beginning balance $3,359.78 Add deposit not
recorded by bank 816.20
Deduct outstanding checks:
No. 812 $1,061.00 No. 878 435.39
No. 883 48.60 1,544.99
$4,175.9 8
Depositor’s
records
Beginning balance $2,549.99 Add note and interest
collected by bank 408.00
BANK
Bank’s
books
Deduct outstanding checks:
No. 812 $1,061.00 No. 878 435.39
No. 883 48.60 1,544.99
Depositor’s
records
Deduct check returned because of insufcient funds $300.00
Beginning balance $3,359.78 Add deposit not
recorded by bank 816.20
$4,175.9 8
Beginning balance $2,549.99 Add note and interest
collected by bank 408.00
$2,957.9 9
The bank returned an NSF check from one of the firm’s customers, Thomas Ivey, in the amount of
$300. This was a payment on account.
The bank returned an NSF check from one of the firm’s customers, Thomas Ivey, in the amount of
Deduct outstanding checks:
No. 812 $1,061.00 No. 878 435.39
No. 883 48.60 1,544.99
Deduct check return
because of insufcient funds $300.00
Bank service
charges 18.00
BANK
Bank’s
books
Beginning balance $3,359.78 Add deposit not
recorded by bank 816.20
$4,175.9 8
Depositor’s
records
Beginning balance $2,549.99 Add note and interest
collected by bank 408.00
$2,957.9 9
BANK
Bank’s
books
Depositor’s
records
Beginning balance $3,359.78 Add deposit not
recorded by bank 816.20
Deduct outstanding checks:
No. 812 $1,061.00 No. 878 435.39
No. 883 48.60 1,544.99
$4,175.9 8
Beginning balance $2,549.99 Add note and interest
collected by bank 408.00
Deduct check return
because of insufcient funds $300.00
Bank service charges18.00
$2,957.9 9
Error recording
Check No. 879 9.00
Check No. 879 for $732.26 to Taylor Co. on account, erroneously recorded in journal as $723.26.
Check No. 879 for $732.26 to Taylor Co. on account, erroneously recorded in journal as $723.26.
BANK
Bank’s
books
Beginning balance $3,359.78 Add deposit not
recorded by bank 816.20
Deduct outstanding checks:
No. 812 $1,061.00 No. 878 435.39
No. 883 48.60 1,544.99
$4,175.9 8
Adjusted balance $2,630.99
Depositor’s
records
Beginning balance $2,549.99 Add note and interest
collected by bank 408.00
Deduct check return
because of insufcient funds $300.00
Bank service charges18.00
$2,957.9 9
Adjusted balance $2,630.99
Error recording
Now, if desired, we can
prepare a formal statement
for Power Networking.
Now, if desired, we can
prepare a formal statement
Balance per bank statement $3,359.78
Add: Deposit not recorded by bank 816.20 $4,175.98
Deduct: Outstanding checks No. 812 $1,061.00
No. 878 435.39
No. 883 48.60 1,544.99
Adjusted balance $2,630.99
Balance per depositor’s records $2,549.99
Add: Note and interest collected by bank 408.00
$2,957.99
Deduct: NSF check (Thomas Ivey) returned $300.00 Bank service charges 18.00
Error in recording Check No. 879 9.00 327.00
Adjusted balance $2,630.99
Power Networking Bank Reconciliation
Journal entries must be prepared
for those items that affected the
depositor’s side of the
reconciliation.
Journal entries must be prepared
for those items that affected the
Balance per bank statement $3,359.78 Add: Deposit not recorded by bank 816.20
$4,175.98 Deduct: Outstanding checks
No. 812 $1,061.00
No. 878 435.39
No. 883 48.60 1,544.99 Adjusted balance $2,630.99
Balance per depositor’s records $2,549.99 Add: Note and interest collected by bank 408.00 $2,957.99 Deduct: NSF check (Thomas Ivey) returned $300.00
Bank service charges 18.00
Error in recording Check No. 879 9.00 327.00 Adjusted balance $2,630.99
Power Networking Bank Reconciliation
July 31 Cash 408 00
Note collected by bank.
Notes Receivable 400 00
Interest Receivable 8 00
Entries Related to a Bank Reconciliation
Balance per bank statement $3,359.78 Add: Deposit not recorded by bank 816.20
$4,175.98 Deduct: Outstanding checks
No. 812 $1,061.00
No. 878 435.39
No. 883 48.60 1,544.99 Adjusted balance $2,630.99
Balance per depositor’s records $2,549.99 Add: Note and interest collected by bank 408.00 $2,957.99 Deduct: NSF check (Thomas Ivey) returned $300.00
Bank service charges 18.00
Error in recording Check No. 879 9.00 327.00 Adjusted balance $2,630.99
Power Networking Bank Reconciliation
Entries Related to a Bank Reconciliation
Entries Related to a Bank Reconciliation
July 31 Cash 408 00
Note collected by bank.
Notes Receivable 400 00
Interest Receivable 8 00
30 Accounts Receivable—Thomas Ivey 300 00 Miscellaneous Administrative Exp. 18 00 Accounts Payable—Taylor Co. 9 00
Cash 327 00
NSF check, bank service charges, and error in
Aug. 1 Petty Cash 100 00
Established petty cash fund.
Cash 100 00
On August 1, issued Check No. 511 for $100 to established a petty cash fund.
Aug. 31 Office Supplies 50 00
Replenished petty cash fund.
Cash 88 00
At the end of August, the petty cash receipts
indicated expenditures for the following items:
office supplies, $28, postage (office supplies),
$22; store supplies, $35, and miscellaneous
administrative items, $3.
At the end of August, the petty cash receipts
indicated expenditures for the following items:
office supplies, $28, postage (office supplies),
$22; store supplies, $35, and miscellaneous
administrative items, $3.
Financial Analysis and Interpretation
Solvency is the ability of a business to meet its financial obligations (debts) as they are due.
Solvency analysis focuses on the ability of a business to pay or otherwise satisfy its
current and noncurrent liabilities. This ability is normally assessed by
A. Cash and equivalents $100,000 $ 120,000
B. Current liabilities 400,000 1,500,000
Doomsday ratio A / B 0.25 0.08
Doomsday Ratio
Doomsday Ratio
Laettner Co. Oakley Co.
How are these ratios used? How are these ratios used?
Use: To indicate the company’s ability to meet creditors obligations in the
worst case assumption that should the business cease to exist.
Use: To indicate the company’s ability to meet creditors obligations in the
worst case assumption that should the business cease to exist.
