Submitted by: Jennifer C.

Dela Rosa

I. OBJECTIVES

At the end of this lesson, the students are expected to:

A. Identify the types of bank accounts normally maintained by business, and

differentiate a savings account from current account or checking account.
B. Follow basic bank transactions related to deposits.
C. Write and fill out bank forms such as deposit slips and withdrawal slips, and write
cheques for bank transactions.

II. SUBJECT MATTER

Topic: Basic Documents and Transactions Related to Bank Deposits

ABM Fundamentals of Accountancy, Business, and Management 2 – Grade 12

Materials: Projector
Pictures
Bank forms (Deposit slip, withdrawal slips, check, bank statements)
Pen
Papers

References:

Valencia, et. al. Basic Accounting 3rd edition 2009-2010, Valencia Educational
Supply, 2009.

Weygandt, J. et. al. Accounting Principles 2010 edition. John Wiley and Sons.

Valix, Conrado T. et. al. Financial Accounting Volume 1 2015 editions. GIC
Enterprises & Co. Inc. 2015

III. PROCEDURES

A. Review of Previous Lesson

1. What are the normal balances of the following accounts?

a. Asset
b. Liabilities
c. Equity
d. Income
e. Expense

2. Prepare the journal entries of this transaction:

Submitted by: Jennifer C. Dela Rosa

Ariel Garden Supply Store acquire a land for P800,000. Ariel paid P300,000
cash and issued a promissory note for the balance.

B. Motivation

“Name that tagline” game.

C. Presentation

After the game, ask the following questions:

1. Who among you has an existing bank account?

2. What is your purpose of having a bank account?
3. Why did you open an account to that certain bank?
4. What are the banks existing in your respective communities?

D. Discussion Proper

Business usually maintain two types of account: (1) Savings Account, and (2)
Checking or Current 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• Money held under a checking account can be withdrawn through issuance of a check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.

Other Types of Savings Account

Submitted by: Jennifer C. Dela Rosa

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.

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
• 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:
Submitted by: Jennifer C. Dela Rosa

• 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.

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.

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 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.
Submitted by: Jennifer C. Dela Rosa

• 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.

Crossed 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 exceeds 6 months from the date of the check.

E. Generalization

Call 5 students to summarize the lesson.

Submitted by: Jennifer C. Dela Rosa

F. Application

Distribute to students the sample deposit slips, withdrawal slips and cheques, and ask them to fill
out the forms.

IV. ASSESSMENT

1. What is a bank statement and discuss the importance of a bank statement to a depositor.

Suggested Answer: The bank statement shows the beginning balance, additions, deductions, and
the balance at the end of the period. This statement is issued by the bank to all its depositors and
is usually done on a monthly basis. The bank statement helps the depositor in documenting and
monitoring the movements on his bank account. This will also serve as the basis in the
preparation of bank reconciliation statement, wherein the records of the bank are compared with
records of the depositor. Any discrepancies between the two records can be properly addressed
and corrected.

2. What is a check and who are the parties involved in the issuance of a check? Discuss the role
of each party.

Suggested answer: 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. 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

V. ASSIGNMENT

Write your experience during your first ever bank transaction. Share what happened?
Submitted by: Jennifer C. Dela Rosa