202 Cash in Bank
Assets
Cash and Contracts
Synopsis
Account 202 is established to record the Cash deposited with banks and other financial institutions.
Debits |
Credits |
|
|
Example 1
Record ACH (Automated Clearing House) deposit of $18,750 from a finance company on proceeds received on the sale of a new vehicle.
Journal: Cash Receipts
Entry: |
|
Debit |
Credit |
Account 202 |
Cash in Bank |
$18,750 |
|
Account 205 |
Contracts in Transit |
|
$18,450 |
Account 262 |
Due from Finance Companies |
|
$300 |
Example 2
Record returned check of $1,500 from a customer on a down payment for a purchase of a vehicle.
Journal: General Journal
Entry: |
|
Debit |
Credit |
Account 220A |
Accounts receivables – Customers – Vehicles |
$1,500 |
|
Account 202 |
Cash in Bank |
|
$1,500 |
Example 3
Record check of $5,595 issued to a vendor (trade creditor).
Journal: Cash Disbursements
Entry: |
|
Debit |
Credit |
Account 300 |
Accounts Payable – Trade Creditors |
$5,595 |
|
Account 202 |
Cash in Bank |
|
$5,595 |
Example 4
Record petty cash summary and reimbursement of $205 to the Petty Cash Fund.
Journal: Cash Disbursements
Entry: |
|
Debit |
Credit |
Account 061-05 |
Other Supplies |
$30 |
|
Account 246 |
Sublet Repairs |
$85 |
|
Account 033-09 |
Postage/Freight |
$15 |
|
Account 013-01 |
Delivery Expense |
$25 |
|
Account 070-09 |
Travel and Entertainment |
$50 |
|
Account 202 |
Cash in Bank |
|
$205 |
Comments
A debit balance represents the amount of cash on deposit while a credit balance represents drafts written in excess of cash on deposits.
Note:
The month-end balance should be reconciled with that shown on the bank statements.
All cash receipts should be cleared through Account 225, Cash Sales. When the bank deposit is made, the balance in Account 225, Cash Sales should be zero. (Please refer to Account 225, Cash Sales)
Transactions, which are related, should be recorded in separate sub-accounts. Sub-accounts serve to keep records organized for future analysis and auditing. The sub-accounts in these examples are designated by a letter following the account number (suffix). Please refer to your DSP's instructions for establishing sub-accounts.