Fundamentals of Accountancy, Business, and Management 2

(Module 1 Basic Documents and Transactions Related to Bank Deposits)

After initial transactions in the General Journal, these transactions are further classified into
different accounts. The General ledger serves as a document consolidating daily transactions into
different individual account titles. At the end of this module, you will be able to:
1. Discuss the activities of a bank and its different types of accounts.
2. Understand the purpose and parts of a check.
3. Understand the contents of a bank statemens.

Bank Transactions
Deposits and withdrawals are the common types of transactions that an individual or entity may
conduct with the bank. Deposits are the amounts placed in the bank to earn interest.

Withdrawals, on the other hand, are the amounts removed from the amount that you deposited.
These deposits are placed in a deposit account. A deposit account is the fund maintained by an
individual or an entity in a bank that allowed money to be deposited/placed or
withdrawn/removed by the account holder. Once you deposit money in a bank, you are
considered its account holder.

Types of Deposit Account

However, before opening a deposit account in your bank, you should know which type of
account you would like to open. The most common of all is the savings account. Savings
account is the type of account that we have discussed at the early part of this chapter – you open
it with the bank and earn interest out of it. It can be supported by an Automated Teller Machine
(ATM) card, which is used to withdraw from ATMs or a passbook, which is a booklet showing
you the details of your deposits and withdrawals in the bank.

Here is how the content of a bank pass book savings account looks like:

It has the date and time of the transactions, the type of transaction (deposit or withdrawal) and
the corresponding amount of transaction, which can either increase (through deposits) or
decrease (through withdrawals). The second type of bank account is checking account also
known as current account. Before we further discuss what a checking account is, we need to
understand what a check is.

A sample of a check from the Philippine National Bank (PNB) is as follows:

At the top part of every check, you will see the account number where the amount in the check
shall be deducted from. You will also see the account name, or the owner/s of the deposits in the
bank account. If a check is newly issued, the account name may not be indicated yet. There is
also a check number. Since this is just a sample, the check number is not written. Checks are pre-
numbered to ensure that they can easily be accounted for and what is lost can easily be identified.

Documents on Deposit and Withdrawals

Deposits to any type of accounts require that the account holder fill out the deposit slip. Each
bank has its own format.
This one is a sample of a cash deposit slip from Banco De Oro (BDO) in depositing to account
holders Harny Paz S. Torres.

Though banks have different formats, any deposit slip shall always require the (a) account
number to identify the owner of the account, (b) account name, to ensure the account to receive
cash, (c) date when the deposit is made, (d) type of account of the account holder (savings or
current), and (e) the amount to be deposited.

Although issuing a check in order to pay purchases or expenses, or settle liabilities is a form of
withdrawal, usual withdrawing of amounts from the deposit accounts requires withdrawal slips.
Withdrawal slips almost looks like a deposit slips, except that they may require additional
identification for safety since you are not depositing money in the bank but withdrawing. This is
a way for the bank personnel to establish the KYC procedure to individuals who withdraw. Here
is a Banco de Oro withdrawal slip sample: The details required in a check shall also be the same
information that are required in filling out a withdrawal slip except for the name of the payee.

Bank Statement
A bank statement or a statement of account (SOA) provides the details of the deposits and
withdrawals to the account. It is the same as the contents found in a passbook account. However,
a SOA is a document that is issued monthly by the bank. Though if the account holder requests
an interim copy of the SOA (example, the middle of the month), the bank may produce the same.

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

11/01/14 Balance Forwarded 44,200.00
11/03/14 12345 4,200.00 40,000.00
11/05/14 Deposit 5,000 45,000.00
11/06/14 Interest 500 45,500.00
11/06/14 Wtax 50.00 45,450.00
11/07/14 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.