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Principle of Banking
Chapter 4
| Question | Answer |
|---|---|
| Altered check | A check on which a material change, such as the dollar amount, has been made. |
| Cash | (1) Money in the form of bills or coins; (2) money on hand or in the bank. |
| Cash letter | An interbank electronic or paper transmittal form, resembling a deposit slip, used to accompany cash items sent from one bank to another. |
| Check | A draft on an account in a bank that the owner of the account signs to direct the bank to pay a certain amount to the payee. |
| Depositary Bank | The bank in which a check is first deposited. The bank also may be the drawee if the check is drawn on, payable at, or payable through the bank. |
| Dual custody | A security technique that uses two or more individual parties operating together to protect sensitive functions, information, or assets. |
| Endorsement | A signature (other than the signature of the maker, drawer, or acceptor) typically made on the back of the instrument, such as a check, for negotiating the instrument, restricting payment, or transferring liability of the instrument to another party. |
| Hold | A restriction on the payment of all or any part of the balance in an account. |
| Holder | A person who is in possession of a negotiable instrument and who is entitled to receive payment of the instrument. |
| medium of exchange | Currency or other financial instrument used to facilitate transactions between parties. |
| Negotiable instrument | A check involving three parties: the person writing the check (the drawer), the person to whom the check is written (the payee), and the bank that holds the checking account (the drawee). |
| Negotiable instrument | An unconditional written order or promise to pay a certain sum of money. The document must be easily transferable from one party to another by endorsement and delivery or delivery alone. |
| Nonsufficient funds | An expression indicating that a check or item drawn against an account exceeds the amount of funds available in the account. Commonly called an “NSF” or overdraft. |
| Notary public | A public officer who acknowledges or otherwise attests or certifies documents as authentic, usually under an official seal. |
| On-us Check | A check deposited or otherwise negotiated at the bank on which it is drawn. |
| Positive pay | A bank service that pays a business’s checks only if they match the check data on an electronic list of issued checks that the business sends to the bank. |
| Stop Payment | An order by a depositor to the bank (the drawee) to not pay a previously issued check or item. |
| Substitute check | A paper reproduction of the original check drawn from an electronic file that contains an image of the front and back. |
| Truncation | The process of removing the physical paper check from the processing flow. |
| Uniform Commercial Code | A set of laws adopted by states to govern commercial and financial transactions between parties. Many states add their own amendments to the basic code. |
| Wrongful dishonor | Failure of the drawee to pay a properly payable check. |
Created by:
Sharon.Spence
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