Ch.4 Banking

Full Endorsement

This endorsement identifies the next person or company to whom the check is to be transferred.

Debit Card

Transactions result in money being immediately deducted from customer's checking account.

Checks

Written documents signed by appropriate person that direct the bank to pay a specific amount of money to a particular person or company.

Drafts

Written orders like checks instructing a bank, credit union, or saving and loan institution to pay your money to person or organization.

Mobile Banking

Doing banking transactions on a mobile device such as a smartphone or tablet.

Non Sufficient Funds

Drawer's account lacked sufficient funds to pay written amount of check.

Signature Card

Information card signed by person opening a checking account.

Overdraft

Occurs when company or person wrote a check without enough money in the bank to pay for it (NSF check).

Drawee

One ordered to pay the check.

Payee

One who is named to receive the amount of the check.

Drawer

One who writes the check.

Bank Reconciliation

Process of comparing the bank balance to the checkbook balance so adjustments can be made regarding checks outstanding, deposits in transit.

Check Stub

Provides a record of checks written. It is attached to the check.

Check Register

Record-keeping device that records checks paid and deposits made by companies using a checking account.

Bank Statement

Report sent by the bank the owner of the checking account indicating checks processed, deposits made, and so on, along with beginning and ending balances.

Endorse

Signing the back of the check; thus ownership is transferred to another party.

Banking Apps

Special client application programs like checking account balances, paying bills, and transferring funds for those doing online banking.

Electronic Funds Transfer (EFT)

A computerized operation that electronically transfers funds among parties without the use of paper checks.

Debit Memo (DM)

A debit transaction bank does for customers.

Deposit Slip

Document that shows date, name, account number, and items making up a deposit.

Automatic Telller Machine (ATM)

Automatic teller machine that alllows customer of a bank to transfer funds and make deposits or withdrawals.

Credit Memo (CM)

Bank transactions that increase customer's account.

Restrictive Endorsement

Check must be deposited to the payee's account. This restricts one from cashing it.

Outstanding Checks

Checks written but not yet processed by the bank before bank statement preparation.

Blank Endorsement

Current owner of check signs name on back. Whoever presents checks for payment receives the money.

Deposits in Transit

Deposits not received or processed by bank at the time the bank statement is prepared.