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Ch. 14 business prac
MA chapter 14 business practices-checks, accounts, endorsements, processes,vocab
| Term | Definition |
|---|---|
| Most common types of checking accounts are | Joint and individual; business or commercial |
| EFTS | Electronic Funds Tranfer System; pre authorized transfers made from one account to another |
| Pay by phone | Substitutes check writing; MA asks transfer of funds |
| Automatic Bill pay | Bank given permission by account holder to transfer funds |
| POS banking system | Brings banking to the business location |
| Three parties involved when writing a check | Drawer/payer, drawee, payee |
| Drawer/payer | Orders the bank to pay |
| Drawer | Where money is deposited in a checking account |
| Payee | Who is directed to receive the money |
| Types of checks | Cashiers, certified, counter, electronic, limited, money order, travelers, voucher, warrant |
| Cashiers check | Drawn by bank, made payable out of payees account, signed by bank official, NO stop payments |
| Counter check | Draw funds from own account, pay to the order of "myself only", non-negotiable |
| Electronic check | Aka 21st Century & Check 21; created from a digital image of the original; Reproductions are "substitute checks" |
| Limited check | Statements check is void if written over a certain amount; used for payroll or payment for insurance claims |
| Stale Check | On a limited check time limit to cash the check has passed |
| Money order | Purchased at face value; can get at bank, (convenient stores, post offices) |
| Traveler's check | Printed in denominations of 10, 20, 50 and 100; second signature must be done in presence of person cashing the check |
| Voucher check | Bound with three checks per page; assembled packs w/ a copy retained as a record of the transaction |
| Warrant check | Not considered until it is converted to a negotiable instrument; shows a debt is due because services have been rendered; NO ABA number |
| Certified Check | Guaranteed by bank; written by account holder and drawn on the holder's account |
| FRAUD | Unlawful, check written with knowledge there is not sufficient funds in the account; common: Friday's afternoons, weekends, holidays, evenings |
| Endorsements | Signed on the back by payee exactly as written |
| If endorsers Name is written incorrectly | Endorse twice- wrong name and right names |
| If check is made out to bearer or cash | Negotiable instrument, no endorsement required |
| Blank endorsement | Most common way of endorsing a check; payee signs his/her name on back of check |
| Restrictive Endorsement | "For deposit only"; prevents forgery, |
| Full endorsement | Aka Special endorsement; used when a check is transferred to another person or company; "third party" check |
| NSF | Non sufficient funds; payer doesn't have enough money in account to cover the check; check bounces |
| Misdated check | Post dated check or an old check dated 3-6 months before the day of deposit is NOT honored |
| 12 parts of a check | Personal, payee line, dollar box, amount, memo line, date line, signature line, banking info, routing number, acct number, check number, ABA fraction |
| Currency | Paper money |
| MICR | Magnetic Ink Character Recognition |
| ATM | Automated Teller Machine |
| ABA stands for; what is it for? | American banker association; designates territories, states cit where banks are and federal reserve located |
| Overdraft | Check written greater than balancer in checkbook |
| If an error occurs, to find out if it was transposition on the check stub, divide by | 9 |
| What do you compare information on the check when verifying it? | Signature card |
| Bearer | Person delivering an item for payment |
| Payer | Person signing a check to pay out funds from checking acct |
| ABA number | Bank or transit number |
| Joint checking requires | Signature of one or b oath parties |
| Drawee | The financial institution where the money is deposited |
| If numerical and written amounts on a check do not agree | The payee receives the amount written out |
| All checks received in a medical office should | Be stamped with a restrictive endorsement upon receipt |
| If a check is not written correctly, financial responsibility for any loss is borne by the | Drawer |
| If an error is made on a check when it is written you can | Correct error & initial or draw line and write VOID |
| Third Party Check | Checks made out to one party and fully endorsed over to physician |
| Bank deposits |
Created by:
Gmtassa23
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