Contemporary Mathematics for Business and Consumers Third Edition By: Robert A. Brechner COPYRIGHT © 2003 by South-Western, a division of Thomson Learning. Thomson Learning TM is a trademark used herein under license. ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be reproduced or used in any form or by any means–graphic, electronic, or mechanical, including photocopying, recording, taping, Web distribution or information storage and retrieval systems–without the written permission of the publisher. For permission to use material from this text or product, contact us by Tel (800) Fax (800)

Copyright © 2003 by South-Western All rights reserved. No part of this product may be reproduced, transmitted or used in any form or by any means except as provided in the Harcourt Brace & Company end-user license agreement. Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Harcourt Brace & Company, 6277 Sea Harbor Drive,Orlando, Florida Produced in the United States of America Chapter 4 Checking Accounts

SECTION I: Understanding and Using Checking Accounts. 4-1 opening a checking account and understanding how the various forms are used. 4-2 writing checks in proper form. 4-3 endorsing checks by using blank, restrictive, and full endorsements. 4-4 preparing deposit slips in proper form. 4-5 using check stubs or checkbook registers to record account transactions. SECTION II: Bank Statement Reconciliation. 4-6 understanding the bank statement. 4-7 preparing a bank statement. Chapter 4, Checking Accounts

CHAPTER 4, Checking Accounts Signature cardCancelled checks DepositsCheck or draft PayorCredits Deposit slipDebits Check stubNon-sufficient (NSF)fund Check registerReturned Item EndorsementBank statement Blank endorsementReturn fee item Restrictive endorsementBank statement reconciliation DepositorOutstanding Checks Full endorsementDeposit in transit Adjusted check book balanceAdjusted bank balance Payee

EVERYBODY’S BUSINESS REAL WORLD CONECTION According to the American Bankers Association, there are more than 273,000 ATMs in the United States, performing more than 13.2 billion transactions annually. That’s more than 1.5 every hour. The average withdrawal amount is $60.

Understanding and Using Checking Accounts 4-1 Opening a Checking Account and Understanding How Various Forms Are Used. Chapter 4, Section I

4-2 Writing Checks in Proper Form Steps for Writing Checks in Proper From: Step 1. Enter the date of the check in the space provided. Step 2. Enter the name of the person or business to whom the check is written, the payee, in the space labeled “pay to the order of.” Step 3. Enter the amount of the check, in numerical form, in the space with dollar sign, $. The dollar amount should be written close to the $ sign so additional digits cannot be added. The cents may be written as xx/100 or.xx.

4-2 Writing Checks in Proper Form Steps for Writing Checks in Proper From: Step 4. Enter the amount of the check, this time written in word form, on the next line down, labeled dollars. As before, the cents should be written as xx/100 or.xx. A horizontal, wavy line is then written to end the line. Step 5. The space labeled memo is used to write the purpose of the check. Although it is optional, it’s a good idea to use this space so you will not forget why the check was written. Step 6. The space in the lower right-hand corner of the check is for the signature. It should be written exactly as it is on the signature card.

Chapter 4, Section II, Bank Statement Reconciliation Understanding the Bank Statement 4-7 Preparing a Bank Reconciliation Step 1. Calculate the adjusted checkbook balance. Step 2. Calculate the adjusted bank balance. Step 3. Compare the adjusted balances.

EVERYBODY’S BUSINESS REAL WORLD CONECTION It is important to keep accurate checkbook records and reconcile the account balance each month. “It’s your money.” Banks can and do make mistakes! Inaccurate record keeping on the part of the account holder can cause embarrassment due to incorrect balances, as well as service charges for “bounced” checks.