Chapter 4. Banking 4-1. McGraw-Hill/Irwin. Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved.

Transcription

1 Chapter 4 Banking 4-1 McGraw-Hill/Irwin Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved.

2 Checks Written order instructing a bank, credit union, or savings and loan institution to pay a designated amount of your money on deposit w/the bank to a person or organization Drawee- Bank ordered to pay Drawer - One who writes the check Payee - To whom check is payable 4-2

3 Deposit Slip - Fig 4.1 Gracie s Natural Superstore 80 Garfield Street Bartlet, NH December Date 20 DEPOSITS MAY NOT BE AVAILABLE FOR IMMEDIATE WITHDRAWAL CASH List Checks Singly Total USE OTHER SIDE FOR ADDITIONAL LISTING. < ENTER TOTAL HERE. IpswichBank ipswichbank.com Checks and other items are received for deposit subject to the provisions of the uniform commercial code or any applicable collection agreement 4-3

4 The structure of a check - Fig 4.2 Gracie s Natural Superstore 80 Garfield Street /2113 No. 12 Bartlet, NH Pay 20 March 8 04 To The Order no of $ Staples Corporation 6, no Six Thousand and 100 DOLLARS IpswichBank ipswichbank.com Memo Office Equipment Molly Kate :

5 Check Register RECORD ALL CHARGES OR CREDIT THAT AFFECT YOUR ACCOUNT Number Date Description of Transaction Payment/Debit x Fee Deposit/Credit Balance /15 Staples Co /18 Deposit /22 Health Food, Inc

6 Types of Endorsements Blank Full Restricted Gracie s Superstore Pay to the order of Ipswich Bank Gracie s Superstore Pay to the order of Ipswich Bank For deposit only Gracie s Superstore Check is payable to anyone holding the check. It can be further endorsed. Only the person or business named in the endorsement can transfer the check to someone else. Safest kind of endorsement. Check must be deposited in the firm s bank account. Limits any further negotiation of the check.

7 Credit Card Transactions Manual Deposit Electronic Deposit Fill out slips, batch & deposit Lower monthly fee Money deposited immediately Higher monthly fee 4-7

8 Bank Statement A statement of different types of activity that have taken place during the month Debit - decreases the account - Credit - increases the account + 4-8

9 Bank Statement Ipswich Bank 1 Pleasant St. Bartlett, NH Account Statement Gracies Natural Superstore Checking Acct Garfield St. Barltett, NH Summary as of 3/31/07 Beginning Total Total Service Ending Balance Deposits Withdrawal Charge Balance $13, $8, $9, $28.50 $11, Checking Account Transactions Deposits Date Amount Deposit 3/5 2, EFT Leasing 3/18 1, Interest 3/ Charges Date Amount Service 3/ EFT: Health 3/ Checks Daily Balance Number Date Amount Date Balance 633 3/7 6, /28 13, / /5 15, Monthly Summary: $8, Average Balance: $12,170.38

10 Check Register RECORD ALL CHARGES OR CREDIT THAT AFFECT YOUR ACCOUNT Number Date Description of Transaction Payment/Debit x Fee Deposit/Credit Balance /15 Staples Co /18 Deposit /22 Health Food, Inc When reconciling your checking account, write an x in the X column for every check and deposit listed on the statement.

11 Bank Reconciliation Reconciles the difference between the bank statement and the checkbook Checkbook Bank Statement 4-11 Differences in timing Transactions not entered in checkbook

12 Reconciliation Checkbook Balance +EFT (electronic funds transfer) +Notes collected +Interest earned +Direct Deposit -ATM withdrawals -Automatic withdrawals - Check redeposits -Service charges -Online fees -Overdrafts -Automatic payments -Stop payments -NSF check +/-Book errors Bank Balance +Deposit in transit -Outstanding checks +/-Bank errors Checkbook Bank Statement 4-12

13 Steps in Reconciling Account 1. Identify outstanding checks 2. Identify deposits in transit 3. Analyze bank statement for transactions not recorded in check register 4. Check for recording errors in checks, deposits, addition, or subtraction 5. Compare the adjusted balances, if different repeat steps

14 Bank Reconciliation GRACIE S NATURAL SUPERSTORE Bank Reconciliation as of March 31, 2006 Checkbook Balance Bank Balance Gracie s checkbook balance $6, Bank Balance $11, Add: Add: EFT leasing: Bakery dept. $1, Deposit in transit 3, EFT leasing: Meat dept. 4, $15, Interest Error: Overstated ck # , $13, Deduct: Deduct: Service charge $28.50 Outstanding checks: NSF No. 638 $ EFT Health Insurance pmt No No No No , Reconciled balance $12, Reconciled balance $12,

15 Trends in Online Banking Increase Use of Internet New Bank Legislation Role of Middlemen in the Internet 4-15