Basic Documents and

Transactions Related to
Bank Deposits
 At the end of this lesson, the student will
be able to:

 Identify the types of bank accounts

normally maintained by business.
 Differentiate a savings account from
current account or checking account.
 Prepare bank deposit and withdrawal
slips.
 Identify and prepare checks.
 Understand the contents of a bank
statement.
1. What are the normal balances of the
following accounts:
a. Asset d. Equity
b. Income e. Liabilities
c. Expense

2. Prepare the journal entries of this

transaction:
 Ariel Garden Supply Store acquired a land
for P800,000. Ariel paid P300,000 cash and
issued a promissory note for the balance.

 Have you tried doing transaction in
a bank?
 Who among you has an existing
bank account?
 What is your purpose of having a
bank account?
1. Savings Accounts

 These are intended to provide an incentive for

the depositor to save money.
 The depositor can make deposits and
withdrawals using the form provided by the
bank.
 Banks usually pay an interest rate that is higher
than a checking account or a current account.
 Some savings accounts have a passbook, in
which transactions are logged in a small booklet
that the depositor keeps.
 Some savings accounts charge a fee if the
balance falls below a specified minimum.
2. Checking or Current Accounts
 Money held under a checking account can be
withdrawn through issuance of a check
 Banks usually allows numerous withdrawals and
unlimited deposit under this type of account.
 The interest rate for checking account is usually lower
as compared to a savings account.
 The account holder or depositor of a checking
account is normally provided at the end of the month
a bank statement showing all the deposits made,
checks paid by the bank, and the balance of the
account.
 The depositor is given easy access to the funds as
compared to a savings account.
1. Time Deposit Account

It is also known as certificate of

deposit account. This is a type of a
savings account that is held for a
fixed-term and can be withdrawn
only after the lapse of the agreed
period and by giving notice to the
bank. The account may be withdrawn
also anytime however the bank
usually charges penalties. This type
of account yield high interest.

2. ATM (Automated Teller Machine)
Account
This is an account wherein withdrawals
can be made through designated
machines. This is a 24 hour teller
machine and the funds can be
withdrawn anytime. The advantage of
this account is that even if the banks
are closed, you can withdraw your
funds.
Withdrawal Slip
 Without a withdrawal slip, the bank will not allow you to get money from
your account. The required information in the withdrawal slip are:
 Account Name - the name of the depositor
 Account Number – the unique identifier given by the bank for every
account maintained
 Date of the withdrawal
 Type of account - savings or current
 Currency
 Amount to be withdrawn - the amount that the depositor wishes to
withdraw from his account. The amounts in words and in figures are
indicated.
 Signature of the Depositor – this is the most important part in the
withdrawal slip. The signature is a proof that the depositor is
authorizing the bank to get money from his account. Usually, the bank
compares the signature in the withdrawal slip against the signature in
the bank records submitted during the opening of the account. There
are instances that the depositor cannot attend personally to withdraw
the funds, he may authorize a representative by indicating the name of
the representative in the space provided and the representative must
sign. There is a need for the representative to bring a valid identification
card upon withdrawal otherwise the bank will not approval the
withdrawal.
Deposit Slip
 The bank provides deposit slip that the depositor will fill up every time the
depositor will put in money to his account. The usually required information
in a deposit slip are:
 Account Name – this is the complete name of the depositor that is reflected
in the records of the bank. If it has a pass book, the account name is
indicated on first page inside the
 passbook.
 Account Number – this is a unique identifier of the account maintained by
the depositor.
 Date of Deposit
 Type of Account
 Currency
 Amount in words and in figures – the amount that the depositor wishes to
put into his account. The amount to be deposited maybe in form of cash or
check. If it is a cash deposit, the breakdown of the cash is usually listed in
the deposit slip if it is a check deposit, the details of the checks are
indicated in the deposit slip, for example: Issuing Bank, Address of the
Issuing Bank, date of the check and the amount.
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.Checks
are a type of bill of exchange and were developed as a
way to make payments without the need to carry large
amounts of money. The check number is usually
indicated in the upper right portion of the check.
• 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.
 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.
 The date column indicates the date the transaction was made.
 The check number indicates the details of the check paid by the
bank.
 The transaction code is normally a bank code for the transactions.
 The Debit column represents all charges or deduction made by the
bank to your account. The Credit column represents the deposits or
additions to your account that was made by the bank.
 The Balance column is the running balance after considering the
effect of the transaction to your account.
 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)
 Collection of cash proceeds from notes
receivables.

 Interest income earned by the deposit.

Fill out the withdrawal and
deposit slip.
 Why does a company/individual
issue check?

 Who are the parties involved in the

issuance of check?
It is 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. It is usually done by writing two
parallel lines on the upper left portion of
the check. A crossed check cannot be
encashed over the counter by the payee. It
should be deposited to the payees account.
A cheque 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 6
months from the date of the check.
Graded Recitation

 What is a bank statement and discuss the

importance of a bank statement to a depositor.

 What is a check and who are the parties involved

in the issuance of a check? Discuss the role of
each party.

 What will happen if there are any erasures in the

check?