K. Salvevold

1
Cash Control Banking Activities

• K. Salvevold
• Accounting

2
Protecting Cash

• It is important to protect cash from loss, waste,
  theft, forgery, and embezzlement
• Cash is protected through internal and external
  control

3
How would YOU protect your cash if you were a
business owner?
4
Internal Controls

• Limit the number of persons handling cash
• Separate accounting tasks involving cash
• Bond (insure) employees who handle cash or cash
  records

5
Internal Controls (continued)

• Use a cash register and a safe
• Deposit cash receipts in the bank daily
• Use checks to make all cash payments

6
External Controls

• Verify signatures on checks
• Maintain records of transactions
• Use a bank

7
Advantages of Using a Bank

• Minimizes the amount of cash that must be kept on
  hand
• Provides a double record of all bank transactions
• one by the business
• one by the bank
• Helps a company safeguard its cash by using a
  bank as a depository and clearinghouse for checks
  received and written

8
Using A Checking Account

• Allows a person or business to deposit cash and
  to write checks against the account balance
• A signature card contains the signature(s) of the
  person(s) authorized to write checks on the
  account
• Printed checks are packaged together in
  checkbooks

9
Parts of a Check
10
Writing Checks
11
Deposits

• Most businesses make daily deposits
• businesses do not like to keep a lot of cash on
  hand (internal control)
• Deposits are accompanied by a deposit slip
• gives the depositor and the bank a detailed record

12
Making Deposits to an Account
13
Recording Deposits
Leave the rest of the check stub blank until it
is time to write the next check.
14
Checking Your Understanding

• Why is it important to protect cash?
• What internal controls does a business use to
  protect cash?
• What external controls does a business use to
  protect cash?
• What is the ABA number and where is it located on
  a check?
• What is the process for writing checks?
• What is the process for making a deposit?