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