1. 9-148

2. Cash Receipts, Cash Payments, and Banking Procedures Section 3: Banking Procedures Chapter 9 Section Objectives 8.Write a check, endorse checks, prepare a bank deposit slip, and maintain a checkbook balance. 9.Reconcile the monthly bank statement. 10.Record any adjusting entries required from the bank reconciliation. McGraw-Hill© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

3. 9-150 Objective 8 Write a check, endorse checks, prepare a bank deposit slip, and maintain a checkbook balance.

4. 9-151 Writing Checks

5. 9-152 A check is a written order signed by an authorized person instructing a bank to pay a specific sum of money to a designated person or business. ANSWER: QUESTION: What is a check?

6. 9-153 The drawer is the person or firm issuing a check. ANSWER: QUESTION: Who is the drawer?

7. 9-154 The drawee is the bank on which a check is written. ANSWER: QUESTION: Who is the drawee?

8. 9-155 The payee is the person or firm to whom a check is payable. ANSWER: QUESTION: Who is the payee?

9. 9-156 Checks and Check Stubs This check is a negotiable financial instrument. 1,500.00 Mary Amos Carter Group 8,125.00 1,500.00 12,025.00 The Style Shop 2007 Trendsetter Lane. Dallas, TX 75268 Carter Group One thousand five hundred

10. 9-157 A financial instrument is negotiable if ownership can be transferred to another person or business. ANSWER: QUESTION: What is meant by negotiable?

11. 9-158 1,500.00 Mary Amos Carter Group 8,125.00 1,500.00 12,025.00 The Style Shop 2007 Trendsetter Lane. Dallas, TX 75268 Carter Group Before writing the check, complete the check stub. The check stub shows: Balance brought forward: $12,025.00 12,025.00 Check amount: $1,500 Balance: $8,125.00 One thousand five hundred

12. 9-159 Date 1,500.00 Mary Amos Carter Group 8,125.00 1,500.00 12,025.00 The Style Shop 2007 Trendsetter Lane. Dallas, TX 75268 Carter Group 12,025.00 One thousand five hundred Payee Amount in figures and words Once the stub has been completed, fill in the check. Carefully enter:

13. 9-160 Carter Group 1,500.00 Mary Amos Carter Group 8,125.00 1,500.00 12,025.00 The Style Shop 2007 Trendsetter Lane. Dallas, TX 75268 12,025.00 To be valid, checks need an authorized signature. For The Style Shop only Mary Amos, the owner, is authorized to sign checks. One thousand five hundred

14. 9-161 Endorsing Checks

15. 9-162 QUESTION: What is an endorsement? ANSWER: An endorsement is a written authorization that transfers ownership of a check.

16. 9-163 There are three types of endorsements: Blank endorsement Full endorsement Restrictive endorsement

17. 9-164 A blank endorsement is a signature of the payee written on the back of the check that transfers ownership of the check without specifying to whom or for what purpose. ANSWER: QUESTION: What is a blank endorsement?

18. 9-165 QUESTION: What is a full endorsement? ANSWER: A full endorsement is a signature transferring a check to a specific person, firm, or bank.

19. 9-166 QUESTION: What is a restrictive endorsement? ANSWER: A restrictive endorsement is a signature that transfers a check to a specific party for a stated purpose.

20. 9-167 PAY TO THE ORDER OF FIRST SECURITY NATIONAL BANK THE STYLE SHOP 38-14-98867 Mary Amos 38-14-98867 PAY TO THE ORDER OF FIRST TEXAS NATIONAL BANK FOR DEPOSIT ONLY THE STYLE SHOP 38-14-98867 Full Endorsement Blank EndorsementRestrictive Endorsement

21. 9-168 Preparing the Deposit Slip

22. 9-169 A deposit slip is a form prepared to record the deposit of cash or checks to a bank account. ANSWER: QUESTION: What is a deposit slip?

23. 9-170 Deposit Slip The printed numbers on the lower edge of the deposit slip are the same numbers on the bottom of the checks. The Style Shop 2007 Trendsetter Lane Dallas, TX 75268 First Texas National Bank Dallas, TX 75267 4,860.00

24. 9-171 The Style Shop 2007 Trendsetter Lane Dallas, TX 75268 First Texas National Bank Dallas, TX 75267 4,860.00 The numbers are printed using a special magnetic ink character recognition (MICR) type that can be "read" by machine. Deposit slips and checks encoded with MICR are rapidly and efficiently processed by machine.

25. 9-172 The 12 indicates that the bank is in the 12 th Federal Reserve District. The Style Shop 2007 Trendsetter Lane Dallas, TX 75268 First Texas National Bank Dallas, TX 75267 4,860.00

26. 9-173 The 10 is the routing number used in processing the document. The Style Shop 2007 Trendsetter Lane Dallas, TX 75268 First Texas National Bank Dallas, TX 75267 4,860.00

27. 9-174 The 8640 identifies First Texas National Bank. The Style Shop 2007 Trendsetter Lane Dallas, TX 75268 First Texas National Bank Dallas, TX 75267 4,860.00

28. 9-175 The 38 19 98867 is The Style Shop’s account number. The Style Shop 2007 Trendsetter Lane Dallas, TX 75268 First Texas National Bank Dallas, TX 75267 4,860.00

29. 9-176 The transit number appears on the top part of the fraction that appears in the upper right corner of the check. 1,500.00 Mary Amos Carter Group 8,125.00 1,500.00 12,025.00 The Style Shop 2007 Trendsetter Lane. Dallas, TX 75268 Carter Group 12,025.00 One thousand five hundred The transit number for this check is 11-8640.

30. 9-177 Handling Postdated Checks

31. 9-178 A postdated check is a check dated some time in the future. If the business receives a postdated check, it should not deposit it before the date on the check. Otherwise, the check could be refused by the drawer's bank. Postdated Checks

32. 9-179 Thank You for using College Accounting, 11’th Edition Price Haddock Brock