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3.1 Checking Accounts

3.1 Checking Accounts. Prepare a deposit slip Record entries in a check register. Checking Account. Many people deposit their cash receipts in a checking account at a bank and make their payments by check. A checking account is safe and easy to use.

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3.1 Checking Accounts

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  1. 3.1 Checking Accounts Prepare a deposit slip Record entries in a check register

  2. Checking Account • Many people deposit their cash receipts in a checking account at a bank and make their payments by check. • A checking account is safe and easy to use. • The canceled checks returned to you by the bank provide you with a record of your payments.

  3. Deposit Slip • A deposit slip is used to deposit paychecks and other monies.

  4. Prepare a Deposit Slip 1153 2053 • List cash deposits of bills and coins on the line labeled CASH. • List each check on a separate line. • List additional checks on the back. • Enter total of additional checks on the Total from Other Side line. • Add all the amounts and write the sum on the Subtotal line. • To receive cash back from the bank, write the amount wanted on the Less Cash Received line. • Subtract the cash received from the subtotal to find the Total Deposit. • Sign on the signature line for cash back

  5. Deposit Slip Example • Sherry has check number 825 for $800, she wants to deposit $700 of it and keep $100 in cash. Add signature if getting cash back 825 8 0 0 . 0 0 Sherry Taylor 1 0 0 . 0 0 7 0 0 . 0 0

  6. 280 00 5 85 322 94 June 30 2008 1 45 Sheryl Smock ---- --- 610 24 <-Gross Deposit 100 00 510 24 <-Net Deposit Textbook Pg. 85 Example A Deposit-> 14 twenties, 21 quarters, 6 dimes, checks: $322.94 & $1.45. Cash Received -> $100

  7. 602 00 13 45 39 86 June 30 2008 3 83 ---- --- 659 14 <-Gross Deposit ---- --- 659 14 <-Net Deposit Textbook Pg. 85 Example B Deposit-> 17 twenties, 18 tens, 9 fives, 37 ones, 49 quarters, 12 dimes,checks: $39.86 & $3.83. Cash Received -> $0

  8. Checks • When you write a check you direct the bank to make a payment from your checking account. • Checks are numbered to make it easy to keep track of checks.

  9. Check Register • The check register is part of the checkbook in which deposits and checks are recorded. • A new balance, called a running balance, is calculated after each entry. • Each deposit is added to the previous balance. • Each check is subtracted from the previous balance. • The balance is the amount of money in the account.

  10. Sample Check Register Payment/Debit Money going out Deposit/Credit Money coming in

  11. SEC 3-1 CHECK REGISTER 2583 45 08/11 Deposit1220 00 3803 45 #### 08/13 Check Desc. 825 00 2978 45 #### 08/13 Check Desc. 96 40 2882 05 #### 08/13 Check Desc. 12 782869 27 Final Balance Pg. 87 C – Prev Bal $2,583.45, deposit $1,220, checks: $825, 96.40, $12.78 What’s the final balance?

  12. SEC 3-1 CHECK REGISTER 129 74 08/11 Deposit 500 00 629 74 08/11 Deposit1236 00 1865 74 #### 08/13 Check Desc. 196 00 1669 74 #### 08/13 Check Desc. 950 00 719 74 #### 08/13 Check Desc. 87 83631 91 New Balance Pg. 87 D – Prev Bal $129.74, deposits: $500 & $1,236, checks: $196, $950, $87.83 What’s the new balance?

  13. SECTION 3-1 Rev. Questions • TEXTBOOK PAGE 88 #7-13, 16, 17-19, 27-32 • (17 pts.)

  14. SECTION 3-1 QUIZ • WORKBOOK PAGE 29-30 • I have copies of this to give you • ( 92 pts.) • Internet Extra Credit Quizzes

  15. 3.2 Electronic Banking Record electronic banking transactions Find account balance when banking electronically

  16. Electronic Banking • All banks use computers to process transactions electronically. • Electronic banking allows bank customers to use telephones, computers, and other technologies in place of paper transactions such as writing checks and making loan payments.

  17. Electronic Funds Transfer • Banks use computers to transfer deposits and checks, or “funds,” from person to person and bank to bank. • This process is calledElectronic Funds Transfer,or EFT.

  18. Customer Account Numbers & Bank Identification Number • Banks print the account numbers of customers and the bank identification number in Magnetic Ink Character Recognition, or MICR, form at the bottom of deposit slips and checks. ROUTING NUMBER ACCOUNT NUMBER

  19. Automatic Teller Machine • Individuals can also transfer funds electronically when they use anAutomatic Teller Machine, or ATM. • By using an ATM card issued by your bank, you can withdraw or deposit money, see account balances, or make transfers between your accounts.

  20. Personal Identification Number • A Personal Identification Number, or PIN, that is known only to you is entered into the ATM before your transaction is processed. • The PIN provides protection against unauthorized use of your ATM card.

  21. Paying Bills with EFT • EFTs may also be used to pay your monthly bills, such as utility bills. • You can instruct your bank to transfer funds automatically each month from your bank account to the account of your utility provider. • No checks are written or mailed.

  22. Direct Deposit • Some companies use EFT to pay their employees by transferring funds directly into their employees’ bank accounts without writing any checks to the employees. • This is called direct deposit.

  23. Debit Card • Many people use a special form of EFT called a debit card. • Debit cards allow you to pay for your purchases without using cash.

  24. Using a Debit Card • You insert your debit card into a special computer terminal at stores. • The computer system subtracts the amount of each purchase automatically from your checking account and adds the same amount to the store’s bank account. • You may also use your debit card to withdraw cash from your account. • Fees may be charged for using this card.

  25. Recording Electronic Transactions • When you use a debit card you get a receipt of the transaction. • Save the receipt and immediately record the payment or cash withdrawal in your check register. • Record the payment by writing the word “Debit” and adding a short description as well. • Record an ATM withdrawal by writing ATM-WD. • Record an ATM deposit by writing ATM-DEP.

  26. SEC 3-1 CHECK REGISTER 782 88 DB 08/13 Car Repairs. 85 00 697 88 DB 08/13 Clothing Purch 86 54 611 34 Atm 08/13 Withdrawal 50 00561 34 New Balance Pg. 92 A – Prev Bal $782.88, Debit Card: Car Repairs $85, Clothing Purchase $86.54, ATM Withdrawal $50, What’s the new balance?

  27. SEC 3-1 CHECK REGISTER 1248 40 08/13 Deposit 890 50 2138 90 DB 08/13 XXXXX . 12 87 2126 03 DB 08/13 XXXXX 118 94 2007 09 Atm 08/13 Withdrawal 200 001807 09 New Balance Pg. 92 B – Prev Bal $1,248.40, Deposit $890.50, Debit Card: $12.87, $118.94, ATM Withdrawal $200, What’s the new balance?

  28. SEC. 3-2 ELECTRONIC BANKING - Review Txtbk PAGE 93 # 5-8, 10-15 (16 pts.)

  29. SEC. 3-2 ELECTRONIC BANKING - Quiz Wkbk PAGE 31 # 1-5 (10 pts.)

  30. 3.3 Online Banking Calculate account balance needed to make online payments

  31. 3.3 Online-Account Access • Online banking allows you to do your banking by using your personal computer and the Internet. • Each bank designs its own Internet website. • What you see on your screen and how you use an online banking system differs among banks.

  32. 3.3 Examples of Online Banking Services • Access accounts 24 hours day, 7 days a week • Transfer money between accounts • Receive bills electronically • Make payments • Reorder checks • Communicate with bank staff • View account history

  33. 3.3 Sample Online Banking Screen

  34. 3.3 Making Decisions About Online Accounts • When selecting a bank at which to do online banking, the most convenient choice is the bank you now use. • You should also evaluate the systems at other banks. • Select the system that best meets your needs, is easiest to use, and does so at the least cost.

  35. 3.3 Using Online Accounts • You must identify sources of deposits to the account and decide who will be paid online. • You will also have to determine the dates on which bills are due and the usual amount of the bill if it changes from month to month. • Online banking simplifies the banking process, yet is very similar to using a regular checking account.

  36. SEC. 3-3 ONLINE BANKING • B.) • $67.00 Balance • + 728.00 Deposit • 36.90 Debit Card Purchase • 112.85 Debit Card Purchase • 270.00 Check • 15.00 Check • 128.00 Boat Insurance • 89.23 Charge Card • 45.50 Medical Bill . • $97.52 Textbook pg. 97 Ex B

  37. SEC. 3-3 ONLINE BANKINGReview • Textbook PAGE 98 # 6-8, 11-13 • Quiz at 10:30

  38. SEC. 3-3 ONLINE BANKINGQuiz • WKBK PAGE 32 # 1-4 PRACTICE

  39. 3.4 Check Register Reconciliation Reconcile a bank statement Reconcile and correct a check register

  40. 3.4 Reconcile the Bank Statement • Banks keep track of checking account transactions and send a monthly report, called a bank statement, to depositors.

  41. 3.4 Sample Bank Statement

  42. 3.4 Bank Statement • Typical items on a bank statement • Checks paid by the bank • Deposits, including interest earned • ATM withdrawals • Service charges • Interest earned is money paid to customers for the use of their money. • A service charge is a deduction made by the bank for handling the checking account.

  43. 3.4 Canceled Check • A canceled check is a check that the bank has paid and then marked so it can’t be used again.

  44. 3.4 Transactions Outstanding • Checks that are not returned by the bank are called outstanding checks. • This means that the checks have not yet been received or paid by the bank. • An outstanding deposit occurs when a deposit is made after the closing date of the bank statement and the deposit is recorded in the check register.

  45. 3.4 Reconciliation • The difference (their balances do not match) in the checkbook balance and the bank statement balance is the result of the outstanding transactions, interest earned, and the service charge. • To bring both balances into agreement (or match) and to make sure the bank’s records are correct, both records must be reconciled.

  46. Ms. Smock will hand out the reconciliation forms 3.4 Reconcile the Bank Statement • Follow the steps on the reconciliation form on the back of the bank statement. • Enter Closing Balance from Statement • Add any deposits outstanding • Add lines 1 and 2 • Enter total of Checks Outstanding • Subtract line 4 from line 3. This amount should equal your check register balance. • If not then you need to do more steps

  47. 3.4 Sample Bank Reconciliation Form

  48. 3.4 BUSINESS TIP Outstanding items (checks and deposits) are items that you have recorded in your check register but the bank has not yet received. That means they have not subtracted outstanding checks from the bank balance nor added outstanding deposits to the bank balance. These are two reasons most likely reasons why your balance doesn’t match the bank’s balance.

  49. 3.4 Reconcile the Check Register • Add interest to the balance in the check register. • Deduct service charges from the check register. • The Balance from the check register should now equal the balance on the reconciliation sheet

  50. SEC. 3-4 CHECK REGISTER RECONCILIATION PG 101 A 1.) ENTER CLOSING BAL 2.) ADD ANY DEPOSITS + 3.)ADD LINES 1 & 2 = 4.) TTL OF CHKS OUT - 5.) LINE 3 – LINE 4 = 1,383.53 ------------- 129.45 1,383.53 87.39 216.84 1,166.69 Continue on the next slide - - 216.84

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