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2. 1-2 Chapter 4 Banking McGraw-Hill/Irwin Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

3. 1-3 Define and state the purpose of signature cards, checks, deposit slips, check stubs, check registers, and endorsement Correctly prepare deposit slips, write checks, and complete a check register Explain how a merchant completes a credit card transaction for manual deposit or electronic deposit Banking #4 Learning Unit Objectives The Checking Account; Credit Card Transactions LU4.1

4. 1-4 Define and state the purpose of the bank statement List the steps to complete a bank reconciliation; prepare a bank reconciliation Explain the trends in online banking Banking #4 Learning Unit Objectives Bank Statement and Reconciliation Process; Trends in Banking LU4.2

5. 1-5 Banking Do you have a checking account? Do you balance your checking account? Have you ever written a bad check?

6. 1-6 Checks Written order instructing a bank to pay a designated amount of your money on deposit w/the bank to a person or organization Payee - To whom check is payable Drawee- Bank ordered to pay Drawer - One who writes the check

7. 1-7 Deposit Slip - Fig 4.1 Gracie’s Natural Superstore 80 Garfield Street Bartlet, NH 01835 Date ________________ 20 __________ DEPOSITS MAY NOT BE AVAILABLE FOR IMMEDIATE WITHDRAWAL IpswichBank ipswichbank.com 211370587 88190662 Checks and other items are received for deposit subject to the provisions of the uniform commercial code or any applicable collection agreement USE OTHER SIDE FOR ADDITIONAL LISTING. < ENTER TOTAL HERE. December 1804

8. 1-8 The structure of a check - Fig 4.2 Gracie’s Natural Superstore 80 Garfield Street53-7058/2113No. 12 Bartlet, NH 01835 88190662 Pay____________________20 _____ To The Order of ____________________________________________________$ ___________________ _________________________________________________________________ DOLLARS IpswichBank ipswichbank.com Memo_________________________________________________ :21137058788190662 120000007535 Staples Corporation December 1504 35 Seventy-Five and 100 35 75 100 Molly KateOffice Equipment

9. 1-9 Types of Endorsements Gracie’s Natural Superstore 88190662 Pay to the order of Ipswich Bank For deposit only Gracie’s Natural Superstore 88190662 Blank Full Restricted Pay to the order of Ipswich Bank Gracie’s Natural Superstore 88190662

10. 1-10 Credit Card Transactions Manual DepositElectronic Deposit Fill out slips, batch & deposit Lower monthly fee Money deposited immediately Higher monthly fee

11. 1-11 Bank Statement A statement of different types of activity that have taken place during the month Debit - decreases the account - Credit - increases the account +

12. 1-12 Bank Statement

13. 1-13 Check Register Used to track written check RECORD ALL CHARGES OR CREDIT THAT AFFECT YOUR ACCOUNT Number DateDescription of TransactionPayment/Debit x Fee Deposit/Credit Balance 633 12/15 Staples Co. 75 35 x -75 35 2004 12/18 Deposit 412 78 412 78 634 12/22 Health Food, Inc. 79 33 - 79 33 391 68 335 80 748 58

14. 1-14 Bank Reconciliation Reconciles the difference between the bank statement and the checkbook Differences in timing Transactions not entered in checkbook Checkbook Bank Statement

15. 1-15 Reconciliation Checkbook Balance +EFT (electronic funds transfer) +Notes collected +Interest earned +Direct Deposit -ATM withdrawals -Automatic withdrawals - Check redeposits -Service charges -Online fees -Overdrafts -Automatic payments -Stop payments -NSF check +/-Book errors Bank Balance +Deposit in transit -Outstanding checks +/-Bank errors Bank Statement Checkbook

16. 1-16 Steps in Reconciling Account 1) Identify outstanding checks 2) Identify deposits in transit 3) Analyze bank statement for transactions not recorded in check register 4) Check for recording errors in checks, deposits, addition or subtraction Compare the adjusted balances, if different repeat steps 1-4

17. 1-17 Trends in Online Banking Electronic Bill Paying Electronic Fund Transfer (EFT) Point-of-Sale Terminals