Checks  Checks are the most common form of negotiable instruments Negotiable 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

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 $ 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 Cycle 1. 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 $  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 $ 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