BA10 5.01 Accounting- Chapter 11

voiding a check

Canceling a check by writing the word "Void" across the front in ink.

canceled checks

Checks paid by the bank and deducted from the depositor's account.

outstanding checks

Checks that have been written but have not yet been presented to the bank for payment.

bank statement

An itemized record of all the transactions in a depositor's account over a given period, usually a month.

stop payment order

A demand by the drawer that the bank not honor a certain check.

bank service charge

A fee the bank charges for maintaining bank records and processing bank statement items for the depositor.

deposit slip

A bank form listing the cash and checks to be deposited.

signature card

A card containing the signatures of the persons authorized to write checks on a checking account.

restrictive endorsement

A check endorsement that restricts or limits how a check may be handled (for example, "For Deposit Only").

NSF check

A check returned to the depositor by the bank, because there are not sufficient funds in the drawer's checking account to cover the check.

depositor

A person or business that has cash on deposit in a bank.

check

A written order from a depositor telling the bank to pay a stated amount of cash to the person or business named on the check.

checking account

Allows a person or business to deposit cash in a bank and to write checks against the account balance.

Electronic Funds Transfer System (EFTS)

Allows banks to transfer funds among accounts quickly and accurately w/o the exchange of checks.

endorsement

An authorized signature written or stamped on the back of a check representing receipt and deposit or payment of check.

outstanding deposits

Deposits that have been made and recorded in the checkbook but do not appear on the bank statement.

internal controls

Steps a business takes to protect cash (for example, limiting the # of persons handling cash).

external controls

The measures and procedures provided outside the business to protect cash and other assets.

payee

The person or business to whom a check is written or a note is payable.

reconciling the bank statement

The process of determining any differences between a bank statement balance and a checkbook balance.

dishonored check

a check that a bank refuses to pay. A dishonored check may also be called a NSF check.