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

  1. Cash deposits

  2. Savings deposits

  3. Time deposits

  4. Certificates of deposit

  5. Interest on above deposits

 

  1. Withdrawals

  2. Deposited checks returned by the bank

  3. Bank charges

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.