DOC PREVIEW
MU ACC 221 - The Cash Account
Type Lecture Note
Pages 2

This preview shows page 1 out of 2 pages.

Save
View full document
View full document
Premium Document
Do you want full access? Go Premium and unlock all 2 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 2 pages.
Access to all documents
Download any document
Ad free experience

Unformatted text preview:

ACC 221 1st Edition Lecture 13 Outline of Previous Lecture- Chapter Reviews: The Accounting Cycle Accounting Cycle Process All accounts in Cycleo (P) = Permanent Accounts, (T) = Temporary AccountsOutline of Current Lecture - Section 13: The Cash Account Cash Account Entrieso Cash Account: money goes in or comes outo Bank Reconciliation Bank Balance is Wrongo Deposits Outstandingo Check Outstanding Company Balance is Wrongo Service Chargeso Collection of a NoteCurrent Lecture- Section 13: The Cash Account Cash Account Entrieso Within the cash account, money either goes in or comes out; complexities arise with how we control the cash Internal controls – reconciling the balance of the cash account with outside entity (bank)  If all transactions are correct and up-to-date in both, this will verify the amount of money in accounts. - Look at what you know about (balance) v. what they know about (bank balance) Reconciliation happens outside of accounting cycle; however, transactions may be added if need be- Transactions may be written all at once, or in separate entrieso Bank Reconciliation 2 halves; Company side = ending balance Bank side = bank ledgerThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- Both act as the starting points Bank balance is wrongo Deposit outstanding  Deposit outstanding – an item that the bank does not know about, and therefore is not reflected in the bank’s balance- Bank will correct once they find out- Bank’s side of reconciliation No need to make entry into accounting system; bank will take care of it, adjusting their balance to reflect the missing items and eventually matching your balanceo Check Outstanding  Check outstanding – Checks that the bank does not yet know about- Will bring balances down, must record entry for the month. - Dr. Expense account, Cr. Cash Will eventually balance with company balance Company balance is wrongo Service Charges Service charges – fees owed due to average balance, number of checks written, number of deposits made, or other services provided by the bank The bank’s balance is correct, but the company must reconcile their account- Dr. Cash if increasing balance- Cr. Cash if decreasing balanceo Collection of a note For collections of loans, company may sign legal documents so the bank will handle the collection for them- Company receives the price of the loan, and interest from the loan- Company is charged a fee from the bank for their serviceso Cash increases from loan + interesto Cash Decreases from service fee- Entrieso Dr. Cash, Cr. Note Receivableo Dr. Cash, Cr. Interest Receivableo Dr. Service Charge, Cr. Casho These may be recorded as separate of all together When the company balance is wrong, entries must be made to correct the


View Full Document

MU ACC 221 - The Cash Account

Documents in this Course
Load more
Download The Cash Account
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view The Cash Account and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view The Cash Account 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?