Banking Cash Receipts

To insure an adequate cash record, all receipts, no matter how small, should be deposited in the bank. If an amount received is small, the money may, however, be held in the office until a large enough sum accumulates to warrant making a deposit. Whatever may be the procedure, when a deposit is made such deposit should equal in amount the total cash receipts from the time the last deposit was made. For convenience in proving the correctness of the balance shown by the cash book, as will be described later, a deposit should be made on the last day of each month to include all undeposited receipts, if any, notwithstanding the fact that the amount may be smaller than is usually deposited at other times
during the month.

Under no circumstances should amounts received be used directly in making payments, nor should small receipts be put in the petty cash fund. The reason is that either practice destroys the confirmation of the correctness of the cash record secured when the bank keeps what is practically a duplicate record. Further more, when payments are made with cash received, the proof of payment afforded by a canceled check indorsed
by the creditor is lacking, the cash record is complicated with explanations of transactions out of the ordinary, and the record of receipts and payments is incomplete.

Each payment should be entered in the cash book with sufficient explanatory detail to identify it without reference to any other document or record. Checks should be numbered and the number of each entered in
the cash book. The modern practice is to dispense with the check book stubs by making entries directly in the cash book instead of first on the check stub to be copied later into the cash book.

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