Kinh tế học - Chapter 4: Banking

Chapter 4BankingMcGraw-Hill/Irwin©2011 The McGraw-Hill Companies, All Rights ReservedDefine and state the purpose of signature cards, checks, deposit slips, check stubs, check registers, and endorsementsCorrectly prepare deposit slips, write checksBanking#4Learning Unit ObjectivesThe Checking AccountLU4.14-2Explain the trends in the banking industryDefine and state the purpose of the bank statementComplete a check register and a bank reconciliationExplain the trends in online banking pro and conBanking#4Learning Unit ObjectivesTrends in Banking Industry: Bank Statement and Reconciliation Process; Trends inOnline BankingLU4.24-3Checks/DraftsWritten 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 organizationPayee - To whom check is payableDrawee- Bank ordered to payDrawer - One who writes the checkDeposit Slip - Fig 4.1Gracie’s Natural Superstore80 Garfield Street Bartlet, NH 01835Date ________________ 20 __________DEPOSITS MAY NOT BE AVAILABLE FOR IMMEDIATE WITHDRAWAL IpswichBank ipswichbank.com 211370587 88190662 Checks and other items are received for deposit subject to the provisions of the uniform commercial code or any applicable collection agreementUSE OTHER SIDE FOR ADDITIONAL LISTING. < ENTER TOTAL HERE. March 40953-7058The structure of a check - Fig 4.2Gracie’s Natural Superstore80 Garfield Street 53-7058/2113 No. 633Bartlet, NH 01835 88190662Pay ____________________20 _____To The Orderof ____________________________________________________$ ____________________________________________________________________________________ DOLLARS IpswichBank ipswichbank.com Memo____________________________ _____________________ :211370587 88190662 633 0000006000Staples CorporationMarch 809 xx Six Thousand and 100 xx6,000 100 Molly KateOffice EquipmentTypes of EndorsementsGracie’s Natural Superstore88190662Pay to the order ofIpswich BankFor deposit onlyGracie’s Natural Superstore88190662BlankFullRestrictedPay to the order ofIpswich BankGracie’s Natural Superstore 88190662Can be further endorsedOnly person or company named in the endorsement can transfer the check to someoneLimits any further negotiation of the checkTrends in Banking IndustrySince 2008 trends in banking have been changing rapidly. The government has been involved in many bailout packages due to the financial crises.Some banks have had to close or merge.Check textbook Web site for the latest updates on banking bailouts and government intervention. www.mhhe.com/slater10e.Bank Statement A statement of different types of activity that have taken place during the monthDebit - decreases the account -Credit - increases the account + Bank StatementCheck RegisterUsed to track written checks RECORD ALL CHARGES OR CREDIT THAT AFFECT YOUR ACCOUNTNumber Date Description of Transaction Payment/Debit x Fee Deposit/Credit Balance 633 3/8 Staples Co. 6,000 00 -6,000 002009 634 3/9 Health Food, Inc. 1,020 00 -1,020 00 3/9 Deposit 389 20 +389 20 15,136 249,136 24 8,116 24Bank ReconciliationReconciles the difference between the bank statement and the checkbookDifferences in timing Transactions not entered in checkbookCheckbook Bank Statement ReconciliationCheckbook Balance+EFT (electronic funds transfer) +Interest earned +Notes collected+Direct Deposit-ATM withdrawals-Automatic withdrawals-NSF check-Online fees-Automatic payments-Overdrafts-Service charges-Stop payments+/-Book errorsBank Balance+Deposit in transit-Outstanding checks+/-Bank errorsBank StatementCheckbook Steps in Reconciling Account1) Identify outstanding checks2) Identify deposits in transit3) Analyze bank statement for transactions not recorded in check register4) Check for recording errors in checks, deposits, addition or subtraction5) Compare the adjusted balances, if different repeat steps 1-4Bank ReconciliationGRACIE’S NATURAL SUPERSTOREBank Reconciliation as of March 31, 2011Checkbook Balance Bank BalanceGracie’s checkbook balance $6,588.42 Bank Balance $11,863.02Add: Add:EFT leasing: Bakery dept. $1,808.06 Deposit in transit 3,383.26EFT leasing: Meat dept. 4,228.00 $15,246.28Interest 56.02Error: Overstated ck # 634 720.00 6,6812.08 $13,400.50Deduct: Deduct:Service charge $28.50 Outstanding checks:NSF 104.00 No. 638 $572.00EFT Health Insurance pymt. 722.00 854.50 No. 639 638.94 No. 640 166.00 No. 641 406.28 No. 642 917.06 2,700.28Reconciled balance $12,546.00 Reconciled balance $12,546.00Trends in Online Banking Pros and ConsPROSMany Online savings accounts are paying 3-4% interestOnline accounts like all bank accounts, are protected by the Federal Deposit Insurance Corp up to $250,000 per account holderCONSDelay in transferring funds between accounts up to four daysThe bank will hold up a transfer of funds because it wants to make sure our funds are good before it lets us have them.