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35 terms

Chapter 6 Term

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ABA numbers
numbers printed on checks and deposit slips that contain information as to the bank, the area in which it is located, and the like
Auxiliary record
a business record that is not essential but is helpful in maintaining records that are essential; an example is the petty cash payments record
Bank checking account
an amount of cash on deposit with a bank that the bank must pay at the written order of the depositor
Bank reconciliation
making the bank statement balance agree with the checkbook balance
Bank statement
a monthly report showing the bank's record of the checking account
Blank endorsement
an endorsement consisting only of a signature on the back of a check; a check with this kind of endorsement can be cashed or transferred to another by anyone who has possession of it
Canceled checks
checks that have been paid by the bank out of the depositor's account
Cash
in its most basic meaning, this is currency (paper money) and coin; the definition in a business context also includes checks; money orders, traveler's checks, cashier's checks, bank drafts, and receipts from credit card sales
Cash Short and Over
an account used to bring the Cash account into agreement with the actual amount of cash on hand; this account is used in businesses that have many cash transactions and thus often have small amounts of cash over or under what the cash register shows
Change fund
an amount of money that is maintained in the cash register for making change for cash customers
Change fund account
an asset account in which the amount of the change fund is recorded
Check
a written order directing a bank to pay a specified sum of money to a designated person or business
Checkbook
a bound book of check with stubs; the depositor's record of the checking account
Check stub
part of a check that remains in the checkbook as a permanent record of the check
Combined journal
a multicolumn journal used by small businesses to help save journalizing and posting time; it has two special columns for recording debits ad credit to cash, various other special columns for recording transactions that occur often, and two general columns for recording transactions that occur less often
Depositor
the business or person under whose name a checking account is opened
Deposits in transit
deposits made and appearing in the checkbook but not appearing on the bank statement; also called outstanding deposits
Deposit slip
a form that is prepared when coin, currency, or checks are deposited in a bank account, it indicates the depositor's name and account number and summarizes the amount deposited; also called deposit ticket
zero proof test
a test performed using the plus and minus bars of a calculator; this means that two equal columns have a no difference
signature card
lists personal information and contains the signature of the persons authorized to write checks on a bank account; the bank keeps these on file to help identify possible forgeries
service charges
charges or fees by the bank that are subtracted directly from the depositor's account and appear on the bank statement; also called bank charges
restrictive endorsement
an endorsement on the back of a check that specifies the purpose for which the money is to be used; for deposit only is a common one; means that the check cannot be cashed it can only be deposited
replenishing the petty cash fund
means to fill up; this term means to bring the amount of the fund back up to the level it was at the beginning of the month
petty cash voucher
a voucher used when payment is made from the petty cash fund; shows the amount of the payment, the purpose, and the account to be debited
petty cash payments record
an auxiliary record, one that is used to record payments from the petty cash fund; at the end of the month, the record is summarized and used as a basis for journal entry
petty cashier
the person designated to disburse money from the petty cash fund
petty cash fund
a small amount of cash kept in the office for making small payments for items such as postage and office supplies
payee
the business or person to whom a check is made payable
outstanding check
a check that was recorded in the checkbook but does not appear on the bank statement/ in other words, a check that has been written and entered in the checkbook but has not reached the bank's accounting department
NSF check (non sufficient funds check)
a check drawn against an account in which there are non sufficient funds; a bad check
internal control
the procedures used within a company to protect its assets
full endorsement
uses the phrase pay to the order of, followed by the name of the business or person to whom the check is being transferred; only the specified business or person can cash the check
endorsement
a signature or stamp on the back of a check that transfers ownership of the check to the bank or another person
drawer
the business or person who writes a check
drawee
the bank on which a check is drawn