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© Thomson/South-WesternSlideCHAPTER 231 BANKING AND CREDIT 23.1Financial Institutions 23.2Checking Accounts 23.3Credit and Its Use Chapter 23
© Thomson/South-WesternSlideCHAPTER 232 FINANCIAL INSTITUTIONS Name and describe the four major types of financial institutions Discuss how electronic banking may change money management Objectives Lesson 23.1
© Thomson/South-WesternSlideCHAPTER 233 TYPES OF INSTITUTIONS AND SERVICES Commercial banks Full-service banks offer many financial conveniences and services. Automated teller machines (ATMs) are electronic terminals in which customers can insert a plastic card to withdraw cash, make deposits, or transfer funds to another account. Mutual savings banks Savings and loan associations Credit unions Lesson 23.1
© Thomson/South-WesternSlideCHAPTER 234 ELECTRONIC BANKING Electronic banking is a broad term used to describe various types of electronic fund transfers (EFTs). Automated teller machines (ATMs) Telephone banking systems Computer banking systems Direct deposits or withdrawals Point-of-sale transfers Lesson 23.1
© Thomson/South-WesternSlideCHAPTER 235 DEBIT CARD A debit card is a plastic card used to immediately transfer funds for a purchase from a bank account to a seller. Lesson 23.1
© Thomson/South-WesternSlideCHAPTER 236 CHECKING ACCOUNTS Describe types of checking accounts and how to open an account Illustrate how to write and endorse a check, maintain a check register, make a deposit, and reconcile a bank statement Objectives Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 237 UNDERSTANDING CHECKING ACCOUNTS Checks provide a safe and convenient way to pay bills. Checks can be used as freely as cash. Using checks makes it easier to keep good financial records. Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 238 TYPES OF CHECKING ACCOUNTS Regular checking account Special checking account Negotiable order of withdrawal (NOW) account Share draft account Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 239 SAMPLE CHECK Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 2310 OPENING A CHECKING ACCOUNT A signature card is a form that is completed when opening a checking account. Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 2311 WRITING A CHECK Date Postdating is dating a check ahead of time. Payee The person or institution that you write the check to is the payee. Numerical amount Written amount Purpose or account number Signature Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 2312 A CORRECTLY WRITTEN CHECK Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 2313 KEEPING A CHECK REGISTER A check register is used to record checks written, deposits made, and other transactions. Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 2314 SAMPLE CHECK REGISTER ONE-LINE ENTRY TWO-LINE ENTRY Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 2315 ENDORSING A CHECK An endorsement is your signature, sometimes with a brief message, on the back/left side of a check. Blank endorsement Restrictive endorsement Full endorsement Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 2316 FORMS OF ENDORSEMENT Blank Endorsement Restrictive Endorsement Full Endorsement Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 2317 RULES FOR ENDORSING CHECKS AND WITHDRAWING DEPOSITS Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 2318 MAKING A DEPOSIT The process of putting money into a checking account is known as making a deposit. A deposit ticket is a preprinted form used to make a deposit into a checking account. Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 2319 SAMPLE DEPOSIT TICKET Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 2320 STATEMENT OF ACCOUNT A statement of account is a summary of all transactions completed in a checking account for a given time period. The summary includes: Amount of each check and the date the bank received it Deposits you made Any service charges Any interest earned Beginning and ending balances Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 2321 STATEMENT OF ACCOUNT Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 2322 BALANCING A CHECKBOOK Comparing the bank statement with your check register is known as balancing (or reconciling) a checkbook. Balancing a checkbook ensures that both you and your bank have recorded all the activity on your account accurately. Instructions on how to balance your account are usually printed on the back of the statement. Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 2323 FORM FOR BALANCING A CHECKBOOK Lesson 23.2
© Thomson/South-WesternSlideCHAPTER 2324 CREDIT AND ITS USE Name and describe the two basic types of credit Calculate the cost of credit Lesson 23.3 Objectives
© Thomson/South-WesternSlideCHAPTER 2325 CREDIT Credit refers to the receipt of money, goods, or services in exchange for a promise to pay. Lesson 23.3
© Thomson/South-WesternSlideCHAPTER 2326 TYPES OF CREDIT Loan credit Sales credit Lesson 23.3
© Thomson/South-WesternSlideCHAPTER 2327 THE COST OF CREDIT The finance charge is the total dollar amount you pay for using credit. The annual percentage rate (APR) is the percentage cost of credit on a yearly basis. Lesson 23.3
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