2. There are three types of bank accounts
mostly maintained by a business organization.
These are:
1. Savings deposit;
2. Time deposit; and
3. Current account.
3. Savings Account
A savings account is an interest-bearing deposit account
held at a bank or other financial institution. Though
these accounts typically pay a modest interest rate, their
safety and reliability make them a great option for
parking cash you want available for short-term needs. A
maximum amount of five hundred thousand pesos per
account is insured to Philippine Deposit Insurance
Corporation (PDIC).
A withdrawal slip and deposit slip are written orders to
the bank. These slips are used to take out money or to
put in money to the depositor’s account.
4. Time Deposit Account
A business account where the cash not immediately needed for
operation is place. It has a bigger interest rate than a savings
deposit. The proof of ownership of a time deposit account is
the certificate of time deposit issued by the bank.
This account can be withdrawn only at the maturity date but
banks allow the pre-termination of the account after imposing
penalties to the owner of the account.
The certificate of time deposit contains in its face the amount
of money deposited, interest rate, name of depositor, type of
currency, maturity date and the printed name and signature of
the bank representative.
5. Current Account
This is more popularly known as the checking account. It does
not earn interest and can be withdrawn only by means of
check.
A check is a document that orders a bank to pay a specific
amount of money from a person's account to the person in
whose name the cheque has been issued. The person writing
the cheque, the drawer, has a transaction banking account
where his money is held. The drawer writes the various details
including the monetary amount, date, and a payee on the
cheque, and signs it, ordering his bank, known as the drawee,
to pay that person or company the amount of money stated.
6. The following are the parties involved in a
transaction that uses check as medium of
exchange:
• Drawer, the person or entity who makes the
check
• Payee, the recipient of the money
• Drawee, the bank or other financial institution
where the cheque can be presented for payment.
7. At the end of every month, the bank furnishes a
statement to the depositor showing the
movement of the account. It contains all the
withdrawals, deposits and balance of your account
after every transaction. It may also indicate bank
charges that were deducted by the bank
automatically. Also, interest earned by the account
is likewise reflected.
8.
9. Samples of Debit transaction
• Bank service charge - monthly fee charged by the bank for its
services (Ex. cost of printing checks writing funds to other locations
and other fees)
• NSF - (Not Sufficient Fund) – Banks also use a debit
memorandum when a deposited check from a customer “bounces”
because of insufficient funds.
Nowadays bank refer to this as DAIF (Drawn Against Insufficient
Fund) or DAUD (Drawn Against Uncleared Deposits)
Samples of Credit transactions
• Collection of cash proceeds from notes receivables.
• Interest income earned by the deposit.
12. ME is the owner of ABC General Merchandise. The company
records show that it has an average daily sale of ten thousand
pesos (PHP10,000.00). The money is remitted to ME by the
cashier at the end of the day which ME kept inside the table
drawer. The key of the table drawer is in ME’s possession. ME
only withdrew the said amount until after every four (4) weeks
to pay the purchases.
Questions:
1. Comment on the practice of ME in handling of cash of ABC
General Merchandise?
2. If you are ME, will you do the same? Why?
3. If you are ME what practice/s will you adapt to improve the
cash handling practices of Me if there are any?
13. Case 2:
MY CORPORATION is engaged in a buy and sell business. The cashier
made a canvass of the three different banks where the company could
open a bank account. The result of the canvass are as follows:
A. Bank A could only offer savings deposit account with ATM Machine
Card.
B. Bank B could offer savings and checking account without ATM Machine
Card.
C. Bank C could offer savings and current account with auto transfer
agreement to fund checks issued with insufficient fund
Questions:
1. As an Accountant of MY CORPORATION what option would you
suggest? Why?
2. Do you have the same suggestion if the bank you have selected is five
kilometers farther than the two banks not chosen? Why?
14. Identify and Prepare Checks
What is a check?
A check is a document that orders a bank
to pay a specific amount of money from a
person's account to the person in whose
name the check has been issued.
15. A bank check is a widely accepted form of payment. It is
easy to prepare. Once check can accommodate large
sums and irregular amounts. Bu using a single check as
payment will prevent you from carrying substantial
amounts of bills to pay Php10,000,000. Issuing a check
comes A check which a bank will not accept and
exchange for money or payment. A check should be
covered by sufficient balance in the issuer's checking
account. In the Philippines, issuing a check with
insufficient bank balance is a criminal offense under
Batas Pambansa Blg (BP) 22 on the Bouncing Check Law.
16. Compared to bills and coins, checks are a safer form of
payment. Bank procedures give protection to checks.
Stolen or loss bills are complicated, are difficult, if not
impossible, to recover. On the other hand, banking
procedures ensure that check payments are made only to
the designated payees. Banks require proof of
identification before a check can be cashed out. By
drawing two lines on the left most corner of the check,
the issuer had instructed his bank that the check is for
deposit only and cannot be cashed over the counter.
17. A stop order payment can be given for a lost check or
stolen check. The check itself is evidence of payment.
Once the bank paid the check, it is usually returned to
the account holder for record-keeping.
18. The following are the parties involved in a
transaction that uses check as a medium of
exchange:
Drawer (maker), the person or any entity who
makes the check
Payee, the recipient of the money
Drawee (Payer), the bank or other financial
institution where the check can be presented for
payment
19.
20. Check and its parts:
1. Personal information: Contains details about the account
owner/s.
2. Payee line: Is the person or company who will receive the check.
3. Numeric amount box: The check amount written in numeric
form.
4. Written amount: The check amount written in word form.
5. Bank contact information: Sometimes, it contains the bank
logo, address, or phone number.
6. Check number: The check number helps the account owner/s
track checks.
7. Dateline: Where the date of the check is written.
8. Bank fractional number: Additional identification for the
banking system.
9. Signature line: Where the account owner puts his signature.
21.
22. Various kinds of Checks
1. Personal checks are issued by persons,
a single depositor, or holders of joint
accounts. A corporation issues a
corporate check. A personal check may
have two signatories if the issuing
account is a joint account.
23. 2. A corporate check is seen more too secure
more than a personal check. It is owned by
the issuing corporation.
3. Cross checks are marked to specify an
instruction about the way it is to be
redeemed. A common instruction is to
specify that it must be deposited directly into
an account of the payee.
24. 4. Stale checks are checks which a bank will not accept and
exchange for money or payment because it was written more
than a certain number of months ago. In the Philippines, a
check becomes stale if it exceeds six months from the date of
the check.
5. Cashier's/ Manager’s checks are issued by banks. The
promise to pay is made by the bank, not the person using the
check. This type of check is guaranteed and is often treated the
same as cash. The bank will debit your account or you can pay in
cash for the amount of the check. The check is then written by
the financial institution and signed by the institution's cashier or
manager.
25. 6. A traveler's check is a prepaid check that you use, logically
enough, when traveling. You can get traveler's checks in any
denomination, in all currencies. They are accepted the same as
cash in most hotels, merchants and hotels. They are insured
against loss, theft, damage or destruction.
7. A money order is a type of check that has been purchased at
either the US Post Office or a financial institution. A money
order is prepaid with cash, debit card or traveler's check. You do
not need to have an account with a financial institution to
purchase or cash a money order.
26. 8. Bearer Check is payable to anyone who presents the check.
The check can be marked "cash," without naming anyone in
particular. This means that the person in possession of the
check can take it into the paying bank and receive the money
without having to bank the check into their own personal
account.
9. A postdated check is a check on which the issuer has stated a
date later than the current date.
27. Notes in handling checks.
A. Stale Check
A check becomes invalid after 180days or 6 months from the
date it was issued.
Ex. A check that is issued in January 1, 2020 may only be valid
for transaction until June of the same year.
B. Post-dated check
A check that is dated at a future date.
Ex. A check released in January 1, 2020, was dated as March 30,
2020. This check may be transacted only as soon as March 30,
2020 arrives.
28. Notes in handling checks.
C. Crossed check
This means that the check is restricted for payees account
and will only
be accepted for deposit, thus, it cannot be encashed over the
counter.
This is done by writing two parallel lines on the upper left
corner of the
check.
29. D. Bouncing check
A check that cannot be honored by the bank because the
drawer has no sufficient funds to cover the amount of the
check.
Ex. If you have P10,000 in your bank account, you can only issue
checks below that amount.
→When writing a check carefully write the details and avoid
erasures.
→When receiving checks make sure that the checks issued to
you are free from errors
30. Bank Statement
A bank statement contains relevant information including:
A. Customer’s information – identifies the name and
location of the account
holder. It is important to make sure that this information is
correctly stated without misspellings.
B. Bank’s information - the name, phone number and
address of the bank.
C. Account information - this help identify the account
number and the type of account that is held by the account
holder.
D. Transactions: deposits made during the statement
period, and withdrawals through cheques, bill payments,
ATM withdrawals, bank fees and debit purchases.
32. Notes to understanding a Bank Statement.
1. The Debit column represents all charges or
deduction made by the bank to your account.
Examples of Debit transaction (DEBIT MEMO)
• Bank service charge - monthly fee charged by the
bank for its services (Ex. cost of printing checks
writing funds to other locations and other fees)
• NSF - (Not Sufficient Fund) – Banks also use a debit
memorandum when a deposited check from a
customer “bounces” because of
insufficient funds. Bank refer to this as DAIF (Drawn
Against Insufficient Fund) or DAUD (Drawn Against
Uncleared Deposits)
33. 2. The Credit column represents the deposits or additions to
your account that was made by the bank.
Examples of Credit transactions (CREDIT MEMO)
• Collection of cash proceeds from notes receivables.
• Interest income earned by the deposit.
3. The Balance column is the running balance after considering
the effect of the transaction to your account.
37. Performance Task
Direction:
Copy the two rectangles below in another sheet of paper, used your
knowledge on the concepts of the basic documents related to bank
accounts. Make your own design of a deposit and withdrawal slips. The
rubric below will be used in scoring your output.
Rubric:
5 points = either of the deposit and withdrawal slips are complete as to contents, readable and
free from error.
4 points = either of the deposit and withdrawal slips has 1 missing part, or unreadable or 1
error.
3 points = either of the deposit and withdrawal slips has 2 missing parts, or unreadable or 2
errors.
2 points = either of the deposit and withdrawal slips has 3 missing parts, or unreadable or 3
errors.
1 point = either of the deposit and withdrawal slip has more than 3 missing parts or unreadable
or errors.
Editor's Notes
Henry sy
Check and its parts:
1. Personal information: Contains details about the account owner/s.
2. Payee line: Is the person or company who will receive the check.
3. Numeric amount box: The check amount written in numeric form.
4. Written amount: The check amount written in word form.
5. Bank contact information: Sometimes, it contains the bank logo, address, or phone number.
6. Check number: The check number helps the account owner/s track checks.
7. Dateline: Where the date of the check is written.
8. Bank fractional number: Additional identification for the banking system.
9. Signature line: Where the account owner puts his signature.
Check and its parts:
1. Personal information: Contains details about the account owner/s.
2. Payee line: Is the person or company who will receive the check.
3. Numeric amount box: The check amount written in numeric form.
4. Written amount: The check amount written in word form.
5. Bank contact information: Sometimes, it contains the bank logo, address, or phone number.
6. Check number: The check number helps the account owner/s track checks.
7. Dateline: Where the date of the check is written.
8. Bank fractional number: Additional identification for the banking system.
9. Signature line: Where the account owner puts his signature.
Check and its parts:
1. Personal information: Contains details about the account owner/s.
2. Payee line: Is the person or company who will receive the check.
3. Numeric amount box: The check amount written in numeric form.
4. Written amount: The check amount written in word form.
5. Bank contact information: Sometimes, it contains the bank logo, address, or phone number.
6. Check number: The check number helps the account owner/s track checks.
7. Dateline: Where the date of the check is written.
8. Bank fractional number: Additional identification for the banking system.
9. Signature line: Where the account owner puts his signature.
Check and its parts:
1. Personal information: Contains details about the account owner/s.
2. Payee line: Is the person or company who will receive the check.
3. Numeric amount box: The check amount written in numeric form.
4. Written amount: The check amount written in word form.
5. Bank contact information: Sometimes, it contains the bank logo, address, or phone number.
6. Check number: The check number helps the account owner/s track checks.
7. Dateline: Where the date of the check is written.
8. Bank fractional number: Additional identification for the banking system.
9. Signature line: Where the account owner puts his signature.
Check and its parts:
1. Personal information: Contains details about the account owner/s.
2. Payee line: Is the person or company who will receive the check.
3. Numeric amount box: The check amount written in numeric form.
4. Written amount: The check amount written in word form.
5. Bank contact information: Sometimes, it contains the bank logo, address, or phone number.
6. Check number: The check number helps the account owner/s track checks.
7. Dateline: Where the date of the check is written.
8. Bank fractional number: Additional identification for the banking system.
9. Signature line: Where the account owner puts his signature.
Check and its parts:
1. Personal information: Contains details about the account owner/s.
2. Payee line: Is the person or company who will receive the check.
3. Numeric amount box: The check amount written in numeric form.
4. Written amount: The check amount written in word form.
5. Bank contact information: Sometimes, it contains the bank logo, address, or phone number.
6. Check number: The check number helps the account owner/s track checks.
7. Dateline: Where the date of the check is written.
8. Bank fractional number: Additional identification for the banking system.
9. Signature line: Where the account owner puts his signature.
1. Who does this check belong to? ________________________________________
2. To whom was the check written for? ___________________________________
3. What is the check number? ____________________________________________
4. How much is the check worth? _________________________________________
5. Can this check be encashed over the counter? Why? ____________________
1. What type of account does Tala have? _____________________________________
2. What was the balance in the account on June 30, 2015? ___________________
3. How much is the total amount deposited to the account in July? ___________
4. On what date was P 50 withdrawn from the account? ______________________
5. What is the reason for the decrease of P 7,000 in Tala’s balance? ___________
1. What type of account does Tala have? _____________________________________
2. What was the balance in the account on June 30, 2015? ___________________
3. How much is the total amount deposited to the account in July? ___________
4. On what date was P 50 withdrawn from the account? ______________________
5. What is the reason for the decrease of P 7,000 in Tala’s balance? ___________
