NAME: GRADE & STRAND:

Fundamentals of Accountancy, Business and Management 2

LESSON 8: Basic Documents and Transactions Related to Bank Deposits

WHAT I NEED TO KNOW?

In this lesson, you will be able to;
 Identify the types of bank accounts normally maintained by a business
 Prepare bank deposit and withdrawal slip
 Identify and prepare checks
 Identify and understand the content of a bank statement

WHAT I KNOW?

Turn on page 5 for your pre – test 7. 

WHAT’S IN?
General journal and general ledger are the basic books of accounts of a business. The first one used
for journalizing and the latter for posting. Hence, the general ledger journal is also called the book of original
entry and the ledger is called the book of final entry. A simplified ledger is the T – account
Journal Entries are prepared by applying the accounting equation. Meanwhile, the normal balance
of an account is derived from its position in the accounting equation – debit on the left side (assets) and credit
on the right side (liabilities and capital). To prepare the journal entry “value parted with” approach. Always
remember, analysis is the secret in bookkeeping.

WHAT’S NEW?

Pre – activity is indicated on page 7 

WHAT IS IT?

Business usually maintain two

types of account:
(1) savings account , and
(2) checking or current account

A. 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 keep
• Some savings accounts charge
a fee if the balance falls below a
Figure 1 https://www.vectorstock.com/royalty-free-vector/word-cloud-banking-vector-1679326
specified minimum
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B. 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• Money held under a checking account can be withdrawn through issuance of a check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

Time deposit account (or a certificate of deposit account) which 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.

Another type of
savings account that is
popularly used
nowadays is an ATM
(Automated Teller
Machine) 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. In order to open
a particular account, the
bank will require Figure 2 https://slideplayer.com/slide/7790368/
individuals certain documents such as valid identification card and will ask you to fill-up the forms prepared
by the bank. Upon approval of the application to open an account, the bank will give the depositor his account
number

Preparation of bank deposit and withdrawal slips

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 depositors account.

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

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 • 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.

Figure 3 https://www.affordablecebu.com/how-to-fill-up-bdo-withdrawal-slip

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

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Figure 4 https://www.thebalance.com/how-to-fill-out-a-deposit-slip-315429

Identify and prepare check (cheque)

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.
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.

Figure 5 https://freechequewriter.com/download/cheque-writing-printing-software-for-the-philippines-banks

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 Cross 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 cross check cannot be encashed over the
counter by the payee. It should be deposited to the payees account.
Stale Check 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 exceed
6 months from the date of the check.
Identify and understand the contents of a bank statement
At the end of every month, the bank furnishes a statement to the depositor showing the movement
of the account. It contain 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.

Sample of a Bank Statement

Juana Dela Cruz Current Account No: 2030071245

Iznart St., Iloilo City Statement Period: 11/01/14 – 11/30/14

Date Check No. Trans Code Debit Credit Balance

11/1/14 Balance Forwarded 44,200.00
11/3/14 12345 4,200.00 40,000.00
11/5/14 Deposit 5,000 45,000.00
11/6/14 Interest 500 45,500.00
11/6/14 Wtax 50.00 45,450.00
11/7/14 Bank Service Charge 150.00 45,300.00
11/10/14 12348 5,200 40,100.00

The date column indicate 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.

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.

As part of control, the bank statement received from the bank is compared with the accounting
records of the business. This process is called bank reconciliation. Bank reconciliation will be discussed in
the succeeding chapters. Together with the bank statements, the banks will include the copies of checks
cleared or paid by the bank for that particular month.

WHAT’S MORE?

For the enrichment exercise of this lesson turn on page 8

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 WHAT I HAVE LEARNED?

A business normally maintains savings and checking accounts with banks. The savings account is
for safekeeping of extra funds of the business from which it will earn interest. In turn, the checking account
is for convenient handling of payments to suppliers and creditors. A savings account uses withdrawal slips
while a checking account issues checks. Another difference is the higher liquidity afforded by a checking
account than a savings account. Checks can be used as the medium of exchange because it is accepted by
banks for deposits.
Banks use different forms to render an efficient service to clients and make their information system
effective. Furthermore, they issue bank statements that record transactions evidenced by various media or
forms. Bank statements are monitored by depositors to ensure that proper debits and credits are taken up
by the bank.

WHAT I CAN DO?

Let’s apply this lesson in a real life scenario turn on page 8.

ASSESSMENT

For your assessment in this lesson turn on page 8

Reference:
Book:
Durana, Merlita M., Fundamentals of Accountancy, Business and Management 2 (2017), Diwa Learning
System Inc.
Rabo, et.al., Fundamentals of Accountancy, Business and Management 1 (2016), Vibal Group, Inc.

Unpublished References:
Published by the Commission on Higher Education, 2016
Chairperson: Patricia B. Licuanan, Ph.D

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 NAME: GRADE & STRAND:
Fundamentals of Accountancy, Business and Management 2
Module 8: ANSWER SHEETS
General Instructions: This answer sheet is use for the answer and solutions purposes only, if the answer sheet is not
enough you can use another separate sheet (short bond paper) and please attached it in this answer sheet.

WHAT I KNOW?

INSTRUCTIONS: Using a Venn diagram, compare and contrast the 2 book of account

General Journal General Ledger

WHAT’S NEW?
Imagine that you are a business owner. How will you answer the following questions as being the owner?

1. What is the purpose of his/her

account or why he/she chose a certain
bank?

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 WHAT’S MORE
Attached on this page a sample or photocopy of blank withdrawal slips, deposit slips, and check
and fill out the blank forms and submit (short bond paper)

WHAT I CAN DO?

Make a graphic organizer that show why companies issue checks. Use the space below for your answer.

ASSESSMENT

Answer the following question;

1. What is a bank statement and discuss the importance of a bank statement to a depositor
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2. What is a check and who are the parties involved in the issuance of a check? Discuss the role of each party.
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