Module 07 (Q1-Week 8-9): The Types of Bank Accounts, Basic Transactions, and

Documents Related to Bank Deposits and Withdrawals

I. LEARNING COMPETENCIES
1. Identify the types of bank accounts normally maintained by a business.
2. Prepare bank deposit and withdrawal slips.
3. Identify and prepare checks.
4. Identify and understand the contents of a bank statement.

II. LESSON PRESENTATION

Motivation
Do you have any bank account?
If you have, what is the purpose of your bank account?

Why do you choose a certain bank?

Types of Bank Accounts Normally Maintained by a Business

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.
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- Money held under a checking account can be withdrawn through issuance of a check.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 Bank Accounts

Time Deposit Account (or a Certificate of Deposit Account)
- Type of a savings account that is held for a fixed-term and can be withdrawn only after the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- The account may be withdrawn also anytime however the bank usually charges penalties.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.

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ATM (Automated Teller Machine) Account
- 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the funds can be withdrawn anytime.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 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 depositor’s 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.

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 Image 7.1. Sample Withdrawal Slip (Source: 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 amount.

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 Image 7.2. Sample Deposit Slip (Source: https://www.sanctuaryvf.org/)

Check (Cheque) Preparation

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.

Image 7.3. Sample Check (Source: DepEd FABM 2 Teaching Guide)

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

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Drawee - the bank or other financial institution where the cheque can be presented for
payment.
More About Checks
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.

Image 7.4. Sample of a Cross Check (Source: https://www.bankexamstoday.com/2015/01/various-types-of-cheques.html)

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 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.

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 Image 7.5. Sample of a Bank Statement (Source: DepEd FABM 2 Teaching Guide)
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.

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III. SUMMARY OF LESSON
 The types of bank accounts normally maintained by a business are savings account and
checking or current account.
 Other types of bank accounts are time deposit account and ATM account.
 A withdrawal slip is a written order to the bank to take out money from the depositor's
account.
 A deposit slip is a written order to the bank to put in money to the depositor’s account.
 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 bank furnishes a statement to the depositor showing the movement of the account at
the end of every month called a bank statement.

IV. PRACTICE
A. Preparation of Withdrawal Slip
Direction: Fill in the withdrawal slip below. Make up information as needed. Cut the withdrawal to
answer. (2 pts. each item)

B. Preparation of Deposit Slip

Direction: Fill in the deposit slip below. Make up information as needed. Cut the deposit slip to answer.
(2 pts. each item)

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C. Preparation of Check
Direction: Fill in the check below. Make up information as needed. Cut the check to answer. (2 pts. each
item)

V. ENRICHMENT
Direction: Answer the following question in 5-7 sentences. Answer on a separate sheet. (10 pts.
each; Correctness of Ideas - 7, Organization of Ideas - 3)
What will happen if there are any erasures in the check? You may do some research.

VI. EVALUATION
Direction: Answer the following questions thoroughly. Answer on a separate sheet. (10 pts.
each; Correctness of Ideas - 7, Organization of Ideas - 3)
1. What is a bank statement and discuss the importance of a bank statement to a depositor.
2. What is a check and who are the parties involved in the issuance of a check? Discuss the role
of each party.

VII. RESOURCES
DepEd FABM 2 Teaching Guide
http://www.accounting-basics-for-students.com/statement-of-owners-equity.html#gallery[pageGallery]/2/
https://www.affordablecebu.com/how-to-fill-up-bdo-withdrawal-slip
https://www.sanctuaryvf.org/
http://www.angelfire.com/fang/of_faith/princess_maggi/123.jpg
https://www.bpiexpressonline.com/p/1/907/check-design
https://www.affordablecebu.com/metrobank-deposit-slip-sample-copy
https://www.bankexamstoday.com/2015/01/various-types-of-cheques.html