Administrative Medical Assisting - CH. 14 Banking

ABA Routing Number

(American Banking Association) The number of an account assigned to a specific bank location.

List three facts about bank transactions and financial documents:

- Involves Privileged Information - Involves Confidential Information - Should be Kept in Locked Files

Bank Statement

A report of deposits, withdrawals, and bank balances sent to a depositor by a bank

Full Endorsement

A signature transferring a check to a specific person, firm, or bank.

Non-sufficient funds (NSF)

A situation in which a check's bank account does not contain enough money to cover the amount written on a check.

Check

A written order for a bank to pay money on demand

Restrictive Endorsement

An endorsement found on the back of a check restricting further transfer of a check's ownership

What should you do when someone wants to cash an unfamiliar check?

Ask for two forms of identification

When an account holder has given the bank permission to transfer funds monthly to pay bills as a substitute for check writting, it is called

Automatic Bill Paying

Bank by mail

Bank service whereby deposits are mailed by the customer to the bank and credited to the customer's account

ATM Skimming

Can occur when thieves use a portable card reading device to record data on a debit or credit cards magnetic strip

A check stub can also be used as a:

Check Register

A machine that imprints figures on a check so that they cannot be changed is called a

Check Writing Machine

A machine that imprints figures on a check so that they cannot be changed is called a:

Check Writing Machine

Most common types of accounts

Checking accounts & Saving Accounts

Automated Teller Machine (ATM)

Computerized terminal that enables a customer to deposit, withdraw, or transfer funds, or obtain other bank services

Writing a check with the knowledge that there are not sufficient funds in the account to cover it is considered and intent to

Defraud

Service Charges

Fees assessed on a bank account for processing transactions and for account maintenance

Forgery

Fraudulent endorsement

Businesses are more vulnerable to check fraud on:

Friday Afternoon, Evenings, Weekends, and Holidays

Voucher Check

Has a detachable check stub, or voucher, that contains detailed information about the cash payment

Can you institute a stop payment on a cashiers check?

No

Limited Check

One bearing a statement that indicates the check is void if written over a certain amount

Currency

Paper money in circulation, issued by the government through an act of law

Payee

Person who is directed to receive the money

Drawer/Payer (or depositor)

Person who orders the bank to pay

Patients who do not have a bank account may pay the physician using a special card that has money pre-loaded called a:

Prepaid Card

ATM PIN number

Should be memorized and shared with no one

When using an after-hours deposit feature, when is the money deposited into the account

The deposit is processed by the bank the following morning or held unopened until the depositor can get to the bank personally to make the deposit.

Many banks do not accept:

Third Party Checks

Electronic Check

a check created from digital images of the original

Cashier's Check

a check drawn by a bank, made payable out of the payee's bank account, and signed by an authorized bank official

Certified Check

a check that is guaranteed by a bank.

Warrant

a check that is not considered negotiable until it is converted into a "negotiable instrument", that is, a written order promising to pay a specific sum

Overdraft

a deficit in a bank account caused by drawing more money than the account holds.

Stop Payment Order

a request that a bank or other financial institution not cash a particular check

Counter Check

a special bank check that allows a depositor to draw funds from his own account only, as when he has forgotten his checkbook

internet banking

accessing and managing your account online

Blank Endorsement

an endorsement consisting only of the endorser's signature

Money Order

an instrument similar to a check purchased for face value plus a fee, which may vary depending on where it is purchased. It is signed and issued according to the purchaser's instructions. They are issued by banks, financial institutions, money order companies, the post office, and various grocery or other types of convenient stores.

Savings account

an interest-bearing account into and from which deposits and withdrawals may be made

When deposits are made, they are added to the balance of a bank account or:

credited

Travelers Check

developed for use while traveling and in situations where personal checks may not be accepted or carrying large amounts of cash is not desirable. The are are printed in denominations of $10, $20, $50, and $100.

When reconciling a bank statement and the statement balance and checkbook balance do not agree, what do you divide the difference by to find the transposition error?

divide by 9

The 21st Century Act (Check 21)

federal act that allows the use of electronic checks

Stale check

limited checking bearing statements that indicates the check is void if written over a certain amount or certain date

Checking Account

may or may not be interest bearing; it is subject to withdrawals of funds on deposit by check, debit cards, automatic clearing house (ACH) debits, electronic fund transfers, and online bill paying

Automatic Transfer of Funds

money automatically transferred on a certain day of the month from an interest-paying savings account into a non interest-paying checking account.

Withdrawal

removal of funds

When using bank by mail, always use:

restrictive endorsements

Electronic Funds Transfer System (EFTS)

system by which preauthorized transfers are electronically made from one account to another. (ex. direct deposit of paychecks)

Direct Deposit Service

the automatic electronic deposit of wages or benefits (e.g. payroll/Social Security check) into a customer's bank account explained earlier as an electronic funds transfer

Bank Statement Reconciliation

the process by which the depositor attempts to reconcile the bank statement balance with the checkbook balance.

Drawee (financial institution)

where the money is deposited