Bank reconciliation 2

• Economie

How does the drawer (business) stop payment on a  check?

Answers

By telling the bank not to honor the check (“stop payment order”)

Chapter 11.2

Reconciling the Bank Statement

Pages 287-294

Objectives

Describe special banking procedures.

Journalize the given bank transactions.

Evaluate the electronic fund transfer system.

Checks are usually written or received and deposited without any problems.

Three problems may occur:

• A business does not want the bank to pay a check that was issued.

A business receives and deposits a check from a customer whose account does not have enough money to cover the check. 

• A customer presents a check that has a date in the future.

A stop payment order is a demand by the drawer, usually in writing, that the bank not honor a specific check.

An NSF check is a check returned to the
depositor by the bank because the drawer’s checking account does not  have enough funds to cover the amount. NSF stands for Not Sufficient  Funds. An NSF check is also known as a dishonored or bounced check.

The Check Clearing for the 21st Century Act, known as Check 21, went into effect in 2004.It allows the conversion of a paper check to an electronic image that can be processed quickly.

A business might accept a check that has a future
date instead of the actual date. This check is called a postdated check. It 

should not be deposited until the date on the check

What is a demand by the drawer, usually in writing, that the bank not honor a specific check?

1. NSF
2. Postdated check
3. Stop Payment order
4. Check 21

What does the accountant do to record a stop payment?

Why do businesses accept post dated checks?

On November 12 a check for $550, written by Burton Company for payment on account and deposited by
Zip, was returned by the bank because of insufficient funds in Burton’s account

Journalize the transaction

Journalize the transaction.
1.Interest paid by the bank to customer $20

What is the condition for receiving an interest on amount saved?

Banks use the electronic funds transfer system (EFTS) to handle such a
large volume of transfers. The EFTS allows banks to transfer funds among  accounts quickly and accurately without the exchange of checks.

Direct payroll deposit. Employers can electronically transfer

employees’ pay to each employee’s bank account.

Automated bill paying. A depositor can authorize the bank to transfer
funds from his or her checking account to the creditor’s bank account.

Bankcards. A bankcard, also known as an ATM card, is a bank-issued card that can be used at an automated teller machine to

conduct banking activities.

Bank-by-phone service

Online banking

For what type
of transactions would you use online
banking or a debit card?

What do you think are the advantages of direct payroll deposit to employers and employees?

What is the important points of lesson?