CHECKS, DEPOSITS, AND

CHECK REGISTERS

Checks Checks are the most common form of

negotiable instrumentsNegotiable instruments- a written order promising

to pay a sum of money Preferred method of payment for many debts Write checks in blue or black ink

Parts of a Check

Parts of a Check

Writing a Check

On 9/25/11 you bought your mom a birthday gift at Hallmark for $64.73.

On 9/27/11 you buy $132.46 in groceries at Kroger.

Endorsing a Check Blank endorsement

Restrictive endorsement

Special Endorsement

Check Stubs Check stubs record the cash in bank

All account transactions: payments, deposits, and bank service charges

Similar to a check register

Check Cycle1. Write a check to a

store

2. Store accepts your

check

3. Check is deposited in

store’s account

4. Bank passes check

to a clearinghouse

5. The clearinghouse sends it back to your bank

6. The bank deducts the money from your account

7. Check goes back through the

clearinghouse to the store’s

bank

8. Store’s bank deposits

money into store’s

account

Deposit Slips

Filling out a Deposit Slip

On September 28, 2011 you deposited $200 in cash and checks for $100 and $35.00.

Why keep a register? Keeping a checkbook register is extremely

important Accurate registers will keep you from

overdrawing your account Overdraft fee’s Bouncing checks

Balancing a Check Register On September 28, 2011 you made a deposit for $335.00 On 9/25/11 you buy your mom a birthday gift at Hallmark for

$64.73 using check #105 On 9/27/11 you buy books at Barnes and Noble for $102.25

using check #105

Check terms Void- when an error is made on a check

“void” is written so it cannot be used Outstanding checks- written but not

cashed Canceled check- checks paid by the

bank and deducted from the depositor’s account

Stop Payment- check canceled by the maker