6 



BULLETIN 865, U. S. DEPARTMENT OF AGRICULTURE. 



amount should be entered as the first item in the Cash Journal, the debit being entered 

 in the Cash column, the credit in the General Ledger column, from which it is posted 

 to this account. 



It ia always desirable that all cash receipts be deposited during the accounting 

 period in which they are received, and that all disbursements be made by check. 

 Often, however, small items are paid in cash. Such expenditures should be covered 

 by an order, which is approved by the manager, showing the amount, the date, 

 account chargeable, and any other necessary information, and should be signed by 

 the payee. At the end of each period a check should be drawn for an amount equal 

 to the disbursements. The charge for this check should be made in the Cash Journal 

 to the various Expense account? and the check must be included in the next bank 

 deposit. 



Bank Account (A 2). 

 (Name of bank. > 



Debit: 



Credit: 



1. With the balance in the bank as l. With the amount of overdraft as 



the shown by the Balance Sheet at the 



time of opening the books. 

 I. With the total of all amounts dis- 

 bursed by check during the 

 period. 

 . With interest charged by the bank 

 on overdraft. 



shown by the Balance Sheet at 

 time of opening the books. 



With the total of all deposits during 

 the period. 



With interest credited by the bank. 



This account will appear in the Ledger under the name of the bank and should 

 be debited with the amount of cash on deposit at the beginning of the period. This 

 balance is determined by taking the balance rendered by the bank and deducting 

 therefrom the total of all outstanding or uncanceled checks. Normally the balance 

 shown by the bank will be in excess of that shown by the organization. 



Debits and credits to this account for interest receipts and payments, and exchange 

 charges will arise from debit and credit memoranda submitted by the bank at the 

 time of rendering its statement. 



Notes Receivable (A ?>). 



Debit: 



Credit: 



1. With the face value of notes of 



1. 



With amounts paid on notes by 



others on hand as shown by the 





their makers, settlements made 



Balance Sheet at the time of 





in any other manner or amounts 



opening the books. 





charged Loss and Gain as uncol- 



2. With the face value of the notes 





lectable. 



received during the period. 







When notes are taken in payment for subscription to capital stock the total amount 

 of such notes should be debited to this account. When notes are discounted at the 

 bank, their face value, less the discount charged, should be debited to the Bank 

 Account. This, however, does not change the notes, there being a contraliability to 

 the bank for the full face value of the notes discounted. This liability is further 

 discussed under Notes Receivable Discounted. 





