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SECTION 7.4: RECONCILING A CHECKBOOK
SECTION 7.4: RECONCILING A CHECKBOOK
Money Orders
Money Orders – check that draws on the money of the bank or other financial business that issued it.
• Used for smaller payments not worth paying the more expensive fees.
• Similar to cashier’s check.
• Differences:
1. Not just banks sell them.
2. Your name, not bank, is on the check.
CASHIER’S CHECK
Traveler's Check
Cashier’s Check – bank’s own, personal check signed by a bank cashier.
• Comes from the banks money (not a loan).
• Bank takes responsibility.
• Fee of approx. $25.
Traveler’s Check – checks you pay for in advance, and if lost or stolen, they are replaced by the issuing company.
• Safe way to travel.
• Fee = 1% of check value.
• 2 signature lines.
• First line you sign when purchased.
• Second line you sign when you spend it.
OVERVIEW
• Personal checks take time to clear.
• Money is not guaranteed.
• Bank does not distribute money until check is “good”.
Critical Thinking: So how do we pay for more expensive items? Would a car dealer take a personal check for $4,000?
CERTIFIED CHECKS
Certified Check – personal check that is stamped and signed by a bank officer.
• Stamp guarantees funds in account.
• Fill out check, go to bank, ask for it to be certified.
• Bank immediately withdraws money from account.
• Fee of $5 - $20.
SECTION 7.5: Types of Checks
STEPS TO BALANCE
1. Bring register up to date with any fees.
2. Starting with your statement, go through each transaction confirming it in your register with checkmark.
3. Record balance from statement.
4. List OUTSTANDING* deposits.
5. Add statement balance and outstanding deposits.
6. List OUTSTANDING* checks.
7. Subtract checks from previous balance.
8. Compare with your register’s balance.
* Outstanding means an item you have recorded in register but not listed on statement.
BANK ERROR?
• Not often.
• Find receipts from your filing system.
• Go to bank, remaining calm and polite.
• If they say they will fix it before next month, follow up.