Financial Accounting: An Integrated Statements Approach, 2nd Edition

After a cash register clerk’s cash has been counted and recorded on a memor-

andum form, the cash is then placed in a store safe in the Cashier’s Department until

it can be deposited in the bank. The supervisor forwards the clerk’s cash register re-

ceipts to the Accounting Department, where they serve as the basis for recording the

transactions for the day as shown below.

316 Chapter 7 Sarbanes-Oxley, Internal Control, and Cash

C ashSales XXX XXX

Accounting

Department

Receipts

Cash

Register

Cash

Cashier’s

Department

Bank

Cash Deposit

Salesperson

Cash

Merchandise

and receipt

Customer

Journal Entry

Some retail companies use debit card systems to transfer and record the receipt of

cash. In a debit card system, a customer pays for goods at the time of purchase by pre-

senting a plastic card. The card authorizes the electronic transfer of cash from the

customer’s checking account to the retailer’s bank account.

Cash Received in the Mail. Cash is received in the mail when customers pay their

bills. This cash is usually in the form of checks and money orders. Most companies’ in-

voices are designed so that customers return a portion of the invoice, called a remittance