October 30, 2016 admin

Cash in Bank—General

Assets

CASH IN BANK—GENERAL ASSET ACCOUNT
1001

ACCOUNT EXPLANATION
Cash on deposit with the bank in the dealership’s regular checking account.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Collection of finance contract CD
    Cash in Bank—General 1001
      Finance Contracts 1020
             
  Collection of parts, service and body shop accounts receivable CR
    Cash in Bank—General 1001
      Accounts Receivable—Parts, Service and Body Shop 1120
             
   Cash portion of daily sales CR
    Cash in Bank—General 1001
      Cash Sales—Clearing 1010
             
  Incentives paid on units placed in daily Rent-A-Car service CR
    Cash in Bank—General 1001
      Rental Vehicles 1650
           
  Cash Received for unused Parts Return Allowance CR  
    Cash in Bank—General   1001
      Ford Receivable—Other     1200
           
  Check issued to pay vendor account, less discount CD  
    Accounts Payable—Trade   2100
      Cash in Bank—General     1001
      Cash Discounts Earned     9100
             
  Bank charges CD    
    Miscellaneous Expense   8820  
      Cash in Bank—General     1001
             
  Rental Security Received from Lessee under lease plan offered by Ford Motor Co. CR    
    Cash in Bank—General   1001
      Accounts Receivable—F.M.C.C.—Lease Plan     1135
             
  First Month Rental Payment CR    
    Cash in Bank—General   1001  
      Accounts Receivable—F.M.C.C.—Lease Plan     1135
             
  Advance Received from F.M.C.C. on sale of Vehicle and Assignment of Lease CR    
    Cash in Bank—General   1001  
      Accounts Receivable—F.M.C.C.—Lease Plan     1135
             
  Purchase of Vehicle and Return of Security Deposit and Deferred Gross from F.M.C.C. at the end of the Lease Term CD    
    Inventory Used Cars or   1350  
    Used Trucks   1360  
      Accounts Receivable—F.M.C.C.—Deferred Gross     1836
      Cash in Bank—General     1001
      Customer Deposits     2300
             
  Predelivery allowance paid by Ford CR    
    Cash in Bank—General   1001  
      Ford Receivable—Preparation & Conditioning     1195
             
  Record Check Received from Ford Motor Company CR    
    Cash in Bank—General   1001  
      Ford Receivable—Vehicle Hold Back     1160
             
  Transfer of cash to money market deposit    
    Money Market Deposits   1015  
      Cash in Bank—General     1001
COMMENTS
  • All daily cash receipts, other than deposits on new and used vehicles, should be entered in this account. Deposits on new and used vehicles should be entered in Account 1003, Cash in Bank—Trust.
  • Account 1015 should be used for money market deposits. Accounts 1004 through 1009 may be used for other checking accounts, savings accounts, time deposits and certificates of deposit. These should be reported as Cash on the financial statement.
  • All cash received should be deposited intact on a daily basis.
  • It is recommended that two authorized signatures be required on all checks and that a check protector be used.
  • Voided checks should be retained and the signature area should be punched or removed to prevent misuse.
  • Bank reconciliations should be prepared immediately upon receipt of the bank statement and canceled checks each month.
  • As a general rule, checks should not be drawn or entered in the records until just before they are to be released to the payee.