personal finance the parts of a check. there are three parties named on a check. payeedrawerdrawee...
TRANSCRIPT
The Parts of a Check
There are three parties named on a check.
Payee Drawer Drawee
The party to whom the check is written
The party who wrote the check and is paying the money
The financial institution where the drawer has an account
The Parts of a Check
A check must include a bank route number, which traces the check back to the account on which it was written.
Example: Chase Bank 072000326
(if account was opened in MI)
The Parts of a Check
A check includes the name and location of the drawer’s bank, a check number, and security features.
The Parts of a CheckA check presented for payment must include a valid date, the drawer’s signature, the payee’s name, and matching numerical and written amounts.
Writing a Check
When you write a check, record the check number, the amount of the check, the date, and the payee’s name in a check register.
check registera checkbook log in which an account holder records checking account transactions
Handling Your Own Checks
Checks should be handled carefully.
There are precautions you should take to secure your financial safety.
Handling Your Own Checks
Do not print sensitive information such as your Social Security number or driver’s license on your checks.
Keep checks, canceled checks, deposit slips, and bank statements in a safe place.
Never leave your checkbook in the open or in a car.
Handling Your Own Checks
Check your bank statements for anything unusual.
Make sure your checks have security features.
Destroy old documents that contain your account number.
Never make a check payable to “Cash.”
Balancing Your Checkbook
The first step to reconciling your accounts is to see whether the bank has processed all your checks and deposits.
Balancing Your Checkbook
By comparing your check register and your bank statement, you can identify outstanding checks.
outstanding checkschecks that have been written but have not yet been cashed
Balancing Your Checkbook
The total dollar amount of outstanding checks should be subtracted from the balance shown on the bank statement.
Balancing Your Checkbook
Other items to consider when balancing your checkbook include:
Bank fees
ATM deposits or withdrawals
Interest earned
Bank Statements
A bank statement includes a record of all withdrawals, deposits, interest, and fees.
bank statementthe bank’s record of all the transactions in a checking account
Bank Statements
Canceled checks are proof that money has been paid to payees.
canceled checkschecks that have been cashed
A bank statement includes a record of canceled checks.
Making Deposits
A deposit slip lists the amount of cash and checks and the total amount of the deposit.
After you make a deposit, record it in your check register.
Making Deposits
To deposit or cash a check requires an endorsement.
endorsementthe signature of the payee on the back of the check
Do not sign a check until you are ready to deposit or cash it.
Making Deposits
When making a deposit, write “For Deposit Only” as part of the endorsement.