4.02 CCheck Writing & Endorsements

Students will understand and apply steps in writing checks & appropriately endorsing checks.

Parts & Parties to a Check/Share Draft

Melanie PaigeCharles Paige 319619 Main StreetRaleigh, NC 27601 2-131/1034

July 16, 2010Pay To the Order of _____Donnie Tatum______________________$100.50_One hundred and 50/100 ---------------------------------------------------DOLLARS

State Credit Union

For _______________ Charles Paige

2131/1034:78434 234320 100.50 07-18-2010 2251

Drawer’s Name & AddressJoint Account 3. Payee 2. Check

Date

7. Drawer’s Signature - Last item completed on check!

Bank Name - Drawee

CheckNumberABA #

MICR Banking #s6. Memo

4- numeric amount

5- amount in words

Parties to a Check/Share Draft* Drawer

owner of the account who signs the check

Drawee bank or other

financial institution that pays a check presented for payment

Payee person to whom the

check is written

Checking accounts are a legal contract between drawer and drawee.

Drawer demands action from the drawee.

Examples of demands: Process check from

account Accept deposits into

account

*Share Drafts are issued by credit unions, but process like a check.

Check Writing Procedures1. Write information in the check register first,

(ensure checks are written in numerical order)2. Write the date the check is written.3. Write the payee’s name.4. Write in the numerical amount of the check.5. Write in the amount of the check in words.

*Numeric and amount in words should match

6. Write in the purpose of the check in memo section

7. Sign the check using authorized signature.

Keep Accurate Records!Check Register Balance To keep a continuous or running balance:Start with beginning balance , then record+ deposits - checks written - debit card transactions - ATM transactions - service fees charged= Ending Balance

How Do I Know the Amount in my Checking Account?

Keep a Check Register or Check Stub* Continuous Balance

a. Subtract checks written (or debit card transactions) from balance

b. Add deposits to balancec. Keep a running balance

after writing checks or making deposits

• Check Register/stub is YOUR documentation of how much money is in your account?

• What if mistakes are made?

• You will make corrections when you reconcile (balance) bank statement*Check stub is part of check

that stays in check book. Check details and a continuous “running” balance is maintained.

Check Endorsements

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Definition: Signature of the payee on the back of a check, may include additional instructions allows the payee to cash the check, deposit the

check or transfer payment of the check to someone else.

Different types of endorsements:What type of endorsement should I use ? 1. Blank – to cash check 2. Restrictive – to deposit check into account, or 3. Full/special – to transfer payment of the check to someone

else

* Endorsement provides legal proof that the payee received the funds

EndorsementsHow should a check be endorsed?

Endorser (payee who is signing) should sign the check the way it is on the

front of the check and if the name is misspelled, correct the

signature directly up under the first endorsement

Blank Endorsements Signed with

endorser’s name only (endorser is payee from front of check)

Can be cashed by anyone who holds the check with a blank endorsement!

Don’t use blank endorsement before you are ready to cash or deposit!

X Jane Doe

DO NOT WRITE BELOW THIS LINE

Should match payee’s name

Special/Full Endorsement Transfers payment of a

check to someone else. Payee signs check , then

writes “pay over to” another person

Can be used to make payment on a debt Juan is payee on check Juan owes Maria money Juan transfers payment

to Maria.Might also endorse:

Juan Delgadopay over to Maria Fernandez

Debt = money owed

Full/Special Endorsement Example Transfers payment

to someone else Payee signs the

check over to another person to receive payment

Who was payee on check? John

Who was the check transferred to? Jane

X Pay to the order of

Jane Doe

John Doe

DO NOT WRITE BELOW THIS LINE

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Restrictive Endorsement Limits use of the

check so it can be deposited only to endorser’s account.

Safest type of endorsement

Cannot be cashed by a thief or someone who finds the check

Best to use when mailing a check for deposit or when using the ATM for deposit.

Stamp often used by businesses for speed and convenience