The bank account on which checks are written or drawn. A bank refers to checking accounts as demand deposits.
The bank account on which checks are written or drawn. A bank refers to checking accounts as demand deposits.
What is a checking account? Definition of Checking Account A checking account is a bank account in which a company deposits money and can subsequently withdraw the money by writing a check, using a debit card, arranging...
This activity, which involves playing the float, is sometimes used when a company is facing an overdrawn checking account. Assume that a company has a checking account at NY Bank that is about to overdraw. To prevent the...
How many days after a month ends should the bank reconciliation be done? Definition Bank Reconciliation The bank reconciliation (if prepared or reviewed by someone other than the person with access to the checking...
Our Explanation of Bank Reconciliation will show you the needed adjustments to the balance on the bank statement and also the adjustments needed to the balance in the related general ledger account. A comprehensive...
Usually refers to a statement from the bank showing the activity in a company’s checking account. The statement includes the deposits received by the bank, checks paid by the bank, bank service charge, and other...
A term that refers to a negative checking account balance. It arises when a company writes checks in excess of the amount it has on deposit in its checking account.
, the check will not clear Payer Corporation’s checking account until Monday. Hence, Payer Corporation will have $5,000 of float between Wednesday and Monday. Mary plays the float when she mails her rent check on...
the banking system and eventually the bank of the payee will take the amount of the check from the payee’s checking account. The payee will in turn reinstate the liability amount owed to it by Company X. In essence...
fee to process a stop payment order on a check that ABC had written. How will this fee be recorded by ABC in its general ledger Cash account? Select... As a debit As a credit View Coaching A debit memorandum processed...
Our Explanation of Bank Reconciliation will show you the needed adjustments to the balance on the bank statement and also the adjustments needed to the balance in the related general ledger account. A comprehensive...
Why are some plastic cards called debit cards? I assume the name debit card relates to the reduction in the cardholder’s checking account balance at the time that the card is used. The checking account balances of a...
When does a negative cash balance appear on the balance sheet? Definition of Negative Cash Balance A negative cash balance results when the cash account in a company’s general ledger has a credit balance. The credit or...
with a negative balance in its general ledger account Cash: Checking Account. (At the bank, the checking account has a positive balance due to the time it takes for the company’s checks to clear.) In order to avoid...
What is an overdraft? Definition of Overdraft An overdraft (also known as a bank overdraft) generally means that the amount of a company’s checks being presented at the bank for payment exceeded the amount on deposit....
A bank or investment account with a fluctuating interest rate. Usually the funds can be withdrawn on demand, even though the account is not a checking account.
A person or business that has a checking account or savings account at a bank.
A check often referred to as an NSF check, a rubber check, or a check that bounced. It is a check that was not paid by the bank of the issuer (writer) of the check because the checking account of the issuer did not have...
was returned unpaid. Perhaps, the customer’s checking account balance was insufficient, perhaps a stop payment order prevented the check from being paid, or perhaps there was another reason. When the unpaid check...
Usually a plastic card that is used in place of writing a check. The amount of the transaction is immediately deducted from the user’s checking account.
This term refers to checking account balances. On a bank’s balance sheet, demand deposits are reported as current liabilities.
A fee for the printing of checks ordered by a company. Often the amount is deducted automatically from a company’s checking account by the company that printed the checks.
A negative balance in the bank’s records for the company’s checking account.
A term used to describe checks written by a company that have been received and paid by the bank on which they were drawn or written. The check number and amount will appear on the company’s checking account...
This is an administrative expense which reports the fees incurred by a company for the expenses associated with its checking account transactions.
A bank account balance that a corporation agrees to maintain with a current or potential lender. For example, a corporation may agree to keep $1 million in its checking account at a bank in exchange for the bank agreeing...
. Examples of a Bank Debit Memo Some examples of a bank debit memo include the following withdrawals from a company’s checking account: The company’s monthly loan payment The fee for printing the company’s checks...
and Over for $1 (the amount that is not accounted for). It is important to realize that the $80 check will be credited to Cash (the company’s checking account). There is no entry to the Petty Cash account when merely...
be repaid within 9 months. The bank deposits the loan proceeds of $30,000 into the company’s checking account at the same bank. The double entry to be recorded by the company is: 1) a debit of $30,000 to the...
of Bank Balance When a company receives its checking account statement from its bank showing June’s activity, the ending balance on June 30 is the bank balance. (Generally, this bank balance will not agree with the...
How do you balance a checkbook? Definition of Balance a Checkbook To balance a company checkbook means comparing the amounts on the bank statement (or other bank account detail) to the amount in the company’s...
account balance. Examples of Bank Debit Memo in a Bank Reconciliation Some examples of bank debit memos include: Bank service charge for maintaining the checking account A subtraction for a customer’s check that did...
Our Explanation of Debits and Credits describes the reasons why various accounts are debited and/or credited. For the examples we provide the logic, use T-accounts for a clearer understanding, and the appropriate general...
A term associated with petty cash. Replenish means to return the amount of actual cash in the petty cash box back to the amount appearing in the general ledger account Petty Cash. This is done whenever the amount of...
checking account. It will require a journal entry into the company’s general ledger accounts. Mark as wrong Mark as right float This is the time it takes between the point when a check is written until the check...
What is an unpresented check? An unpresented check is a check written by a company and entered in its records, but the check has not yet cleared the company’s checking account. In other words, the check has not yet...
general ledger account Cash (or Cash: Checking Account) with the bank’s information. Prior to issuing a company’s financial statements, it is wise to reconcile every balance sheet account by collecting the...
the following: Debit Cash Credit the account(s) that was debited when the check was originally recorded This entry increases the general ledger account Cash (that contains the company’s checking account). It also...
the check was written and recorded. The problem was the previous bank statements. The bank statement balances were too high since the check had not yet cleared the bank checking account. That’s why we subtract the...
Featured Review
"I've been a member of AccountingCoach for a couple of years now, and since signing up, it has helped me refresh my accounting knowledge after taking a break shortly after college to backpack through Central America. I am currently a senior accountant, and became a PRO user because knowledge is key. I find it extremely important to always stay up to date, as well as to support tools that encourage students from all over to continue learning. I truly enjoy how accountable AccountingCoach keeps with the multiple questions and quizzes, and how it always keeps their members up to date. AccountingCoach has provided numerous benefits, including making learning interesting, allowing me to continue or pick up learning on my own time, and the endless education/site improvements that it brings to me as a student." - Denisse
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviews
For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.
We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: