chapter 8

chapter 8 - Objectives: Chapter 8 Accounting for Cash...

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1 Chapter 8 Accounting for Cash Professor Dominica Lee September 2005 2 ACY1111 D. Lee 2005-2006 Objectives: 1. Using the Bank Account as a control device Bank Reconciliation 2. Petty Cash Fund 3 ACY1111 D. Lee 2005-2006 The Bank Account The bank account is a control device. It minimizes the amount of cash that must be kept on hand. In addition, a double record is maintained of all bank transactions. The ending cash balance shown on the bank statement usually differs from the balance shown in the company’s Cash Account, have to reconcile . 4 ACY1111 D. Lee 2005-2006 Bank Reconciliation: (cont’d) It explains the differences between the bank statement balance and the general ledger balance of cash. Common items that cause differences are: 1. Time lags A. Items recorded by the company but not yet recorded by the bank: a. Deposits in transit b. Outstanding cheques B. Items recorded by the bank but not yet recorded by the company: a. Bank collections b. EFT c. Service charge d. Interest revenue e.
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This note was uploaded on 11/26/2010 for the course BA ACY1111/2 taught by Professor C during the Spring '09 term at CUHK.

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chapter 8 - Objectives: Chapter 8 Accounting for Cash...

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