Use of a Bank

2 Pages
Unlock Document

Financial Accounting
Liang Chen

Use of a Bank The use of a bank contributes significantly to a good internal control over cash. It acts as a safeguard for cash, a clearing for cheques, and a second set of records. To open a bank chequing account, the bank runs a credit check and requires the depositor to sign a signature card. The bank provides the depositor with a book of serially numbered cheques and deposit slips. Making Bank Deposits Each deposit must be documented by a deposit slip. Deposit slips are normally prepared in duplicate. The original is kept by the bank. The duplicate is stamped by the bank to establish authenticity, and then kept by the depositor. Electronic Funds Transfer To manually control and account for cash is an expensive and time-consuming process. Therefore, funds are more often transferred among parties as an electronic funds transfer. Writing Cheques A cheque is a written order signed by the depositor that directs the bank to pay a specified sum to a designated re
More Less

Related notes for MGAB01H3

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.