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Chapter 11
Key Terms
| Term | Definition |
|---|---|
| internal controls | procedures within the business that are designed to protect cash and other assets ad to keep reliable records |
| external controls | measure and procedures provided outside the business to protect cash and other assets |
| checking account | bank account that allows person/business to deposit cash in a bank and to write checks against the account balance |
| check | written order from a depositor telling the bank to pay a stated amount to the person or business named on the check |
| signature card | contains the signature(s) of the person(s) authorized to write checks for the account |
| deposit slip | a bank form listing the cash and checks to be deposited |
| endorsement | an authorized signature written or stamped on the back of a check that transfers ownership of the check |
| blank endorsement | only the signature or stamp of the depositor; unspecific to new owner of check |
| special endorsement | transfers ownership of the check to a specific individual or business |
| restrictive endorsement | transfers ownership to a specific owner and then limits how a check may be handled even after the transfer of ownership |
| payee | person/business to whom a check is written |
| drawer | person who signs the check |
| drawee | the bank on the check |
| voiding a check | to write VOID across the front |
| banks statement | an itemized record of all transactions in a depositor's account over a given period |
| cancelled check | a check paid by the bank, deducted from the depositor's account, and returned with the bank statement to the account holder |
| imaged check | a copy of a canceled check; it is sent with the bank statement in place of the original cancelled check |
| reconciling the bank statement | the process of determining any differences between a bank statement balance and a checkbook balance |
| outstanding checks | a check that has been written but has not been presented to the bank for payment |
| outstanding deposits | a deposit that has been made and recorded in the checkbook but does not yet appear on the bank statement |
| bank service charge | a fee the bank charges for maintaining bank records and processing bank statement items for the depositor |
| stop payment order | a demand by the drawer, usually in writing, that the bank not honor a specific check |
| NSF check | a check returned to the depositor by the bank because the drawer's checking account does not have sufficient funds to cover the amount; also called dishonored check |
| Check 21 | the Check Clearing for the 21st Century Act; allows for the conversion of a paper check to an electronic image that can be quickly processed between banks |
| postdated check | A check that has future date instead of the actual date; it should not be deposited until the date on the check |
| electronic funds transfer system (EFTS) | a system that allows banks to transfer funds among accounts quickly and accurately without the exchange of checks |
| bankcard | a bank-issued card honored by many businesses that can be used to withdraw cash and to make payment for goods and services at many businesses instead of writing checks; also called a debit card, ATM card, or check card |
| automated teller machine (ATM) | computer terminal where account holders can conduct various banking activities |
Created by:
talenswan1
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