Unit 4.02

Bank Reconciliation

A bank reconciliation is the document created to show how the two balances (your own record of your checking account and the bank's record of your account) were brought into agreement

types of endorsements

Blank Full Restrictive

Blank Endorsement

Consists of endorser's name only Anyone who has a check with a blank endorsement may cash it.

Depository

Earns money to finance their business by accepting deposits from customers

Non-depository

Earns money to finance their business by selling specific services such as policies, investments, and loans

Check Writing Procedures

Ensure all information is written in the check register first, and ensure checks are written in numerical order. Write the date the check is written. Write the payee's name

Restrictive Endorsement

Limits use of the check so it can be deposited only to endorser's account. Safest type of endorsement, as it cannot be cashed by a thief or someone who finds the check.

outstanding check

Outstanding checks are checks that have not been deducted from the bank statement balance.

Opening a checking account steps

Signing a signature card is the first step Endorsing a check for deposit

Services provided by the Fed

Supervision of banks Participation of open market activities Acting as a clearinghouse Holding reserves Approving bank mergers Supplying paper currency Managing the discount rate

endorsement

allows the payee to cash the check, deposit the check or transfer payment of the check to someone else.

national banks

are required to be members of the Fed; state banks have the option of joining

Federal Reserve (Fed)

is a centralized banking system