202 - Cash in Bank

Current Assets

Cash & Contracts

Synopsis

Account 202

Debits

Credits

  1. The total of all cash deposited.

  2. Stop payment order on issued checks that may be lost or incorrect.

  3. Contracts and drafts deposited by a third party, such as sight drafts.

  4. Bank credit memorandums issued.

 

  1. The amount of all checks issued.

  2. Bank debit memorandums issued.

  3. Returned customer checks.

 

 

Remarks:

Cash In Bank represents the amount of cash on deposit.  Separate general ledger accounts may be established if several bank accounts are maintained (such as 202A, 202B, etc.).  These should be combined on the Subaru Dealer Financial Statement.

 

Daily receipts should be deposited every day.  Night depository facilities should be used on business days when banks are closed and when sizable amounts of cash are received after office hours.

 

The check protector/writer (if used) and all unused checks should be properly safeguarded to minimize possibility of being stolen, lost, or misused.

 

Deposit slips should be prepared in triplicate: original retained by bank; duplicate authenticated by bank and returned to retailer; and triplicate authenticated by bank and returned directly to dealer's attention by bank.

 

All checks should be listed on the deposit slip indicating the aba bank number and the name of the maker.  This procedure will facilitate identification of all receipts being deposited.

 

Voided retailer checks should remain intact, and the signature area punched or removed to preclude possible future use.  Voided checks should be recorded in the cash disbursement journal in their proper numerical sequence to provide an audit trail.

 

Bank service charges, chargebacks, and other bank debit memorandums should be properly and promptly recorded in the cash disbursement journal so that a current “bank balance” can be accurately and readily ascertained.

 

The month-end general ledger balance should be reconciled with the balance shown on the bank's statement.  It is important that all bank accounts are reconciled monthly and that all variances are immediately resolved and recorded as applicable.

 

Cash in Bank should include savings deposits, time deposits, and certificates of deposits.  Securities should be recorded separately in Securities (Account 260).

Note: