Opening a Checking
Account
What type of bank will you choose?
Skill 1
 Types
 Services
– Commercial Banks
– Checking
– Savings and Loans
– Savings
– Credit Unions
– Credit Cards
– Loans
– Safe-deposit boxes
– Other services
How is your money protected?
 Commercial Banks
– FDIC Insurance (Federal Deposit Insurance Corporation)
 Savings and Loans
– Savings Assoc Insurance Fund
 Credit Union
– National Credit Union Admin.
 All deposits protected up to $100,000 per
institution by the Federal Govt. (Now $250,000)
Skill 2
Opening a Bank Savings or
Checking Account
Goals for Skill 2
 How do we open a bank checking account?
 How do I complete a signature card?
 How do I complete a deposit slip for a
personal checking account or a savings
account?
Vocabulary
 ABA Number
 Forged signature
 Individual checking
account
 FDIC
 Joint checking
account
 Personalized deposit
slips
 Signature card
Understanding the Job
 How do we pay our bills?
–
–
–
–
–
Cash?
Don’t pay at all?
With money orders?
Go to the business in person?
Credit cards?
 What if a credit card is not an option?
Write a check!
1. Convenient
Why?
2. Safer than cash
3. Provides a paper trail
Understanding the Job cont.
 What types of checking accounts are available at
a bank?
 Individual Checking account
 Joint Checking account
 Money Market Checking account
 How do you decide which bank to choose?
 Is the bank convenient to your home or business?
 Does the bank provide the services you need?
 Does the bank charge for a checking account?
 Is it FDIC insured?
Understanding the Job cont.
 What forms might you need to fill out
when you go to the bank?
– Application
• Why? – To have all your current information on file.
– Signature Card
• Why? – To prevent forged signatures
– Personalized Deposit Slips
• Why? – Save time at the bank
• Less chance of bank or personal errors
• Contains the ABA Number
Let’s fill in the blank
signature card
Understanding the Job cont.
Steps to fill out a deposit slip.
1.
2.
3.
4.
5.
Enter the date
Enter bills deposited
Enter coins deposited
Enter checks deposited
Calculate and enter the total.
Fill in the Sample as we
follow the steps.
Questions
Let’s Review
 What do we need to do to open up a
checking account?
 How do we complete a signature card?
 What are the steps to complete a deposit
slip?
Practice Classwork/Homework
 Application Problem Job 27
 Define vocabulary words and put them in
your binder
 Points = 45
Skill 3
 Endorsing Checks
Goals for Skill 3
 How do I transfer a check from one party
to another?
 How do I cash and/or deposit a paycheck?
 How do I handle a split deposit of a check?
Vocabulary
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
Blank endorsement
Canceled checks
Clearinghouse
Endorsement
Full endorsement
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
Leading edge
Negotiable
Restrictive endorsement
Split deposit
Trailing edge
Understanding the Job
 What do you do with a check that
you receive?
– Cash it
– Deposit all of it
– Deposit part of it
 You need to transfer ownership from you to the
bank by …?
– Endorsement
• “Pay to the order of”
• Allows you to transfer ownership to another party
– Bank
Understanding the Job cont.
 Why is a check considered negotiable?
– It can be transferred to another party
– Just like money
Follow me with demo problem Job 26
 What do you do with the check at the bank?
– Trailing edge – 1 ½” of the top of the check where a
signature can be written (Left side of check front)
– Blank endorsement – signature only
• What happens if you lose this signed check?
• A blank endorsement does not state who the check is being
transferred to.
– MICR numbers are encoded onto the check
Understanding the Job cont.
– The first bank (Manuel’s) endorses the check
 Who goes to get the money from Marty’s bank?
– The check is sent to a clearinghouse for processing
– The clearinghouse computers read the MICR numbers and
complete the transactions
– Money comes out of Marty’s bank and into Manuel’s
– The second bank to touch the check (Clearinghouse)
endorses the check near the Leading Edge (Right side of check front)
of the check
 Now what happens to the check?
– Check goes back to Marty’s bank and money is taken from
Marty’s account
– Check is now stamped “PAID” and becomes a cancelled
check.
Understanding the Job cont.
 What other types of endorsements are
available to me?
Let’s look at
– Restrictive endorsement
– Full endorsement
Restrictive with
sample problem 2.
 When would you use a Full endorsement?
– You don’t have a bank account
– You owe somebody money
Steps to endorse a check
1) Enter the check
2) Prepare the deposit slip
3) Record the deposit in the check register
•
Only if you put some of the check into your account.
Let’s do the Job 26
Demo together
Questions
Let’s Review
 How do I transfer a check from one party
to another?
 How do I cash and/or deposit a paycheck?
 How do I handle a split deposit of a check?
Let’s look at a Split Deposit
with sample problem 3
Practice Classwork/Homework
 Application Problem Job 26 Page 207
 Points = 30
 Quiz tomorrow on vocabulary.
Skill 4
 Writing Checks
Goals for Skill 4
 How do I complete a check register for my
checking account?
 How do I write out checks for my checking
account?
Packet page: Job 23 overheads
Vocabulary
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



Check
Check register
Check stub
Checkbook
Drawee
Drawer

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
Issue
Legible
Payee
Insufficient funds
(NSF)
 Postdated
 Void
Understanding the Job
 Now that you have a checking account, how do keep track
of all the checks you issue? (write out)
– You use the checkbook
 How do you know how much money you have in your
account?
–
–
–
–
Call the bank?
Check on-line?
Wait for a statement?
Keep a record of your transactions!
 What is a check stub for a business account? A check
register?
– A type of permanent record
 Why is it important to fill it out?
– To keep accurate records
Understanding the Job cont.
 Who are the three parties involved in a
check.
– Drawer – the person who writes the check
– Drawee – the bank that is ordered to pay on the check
– Payee – the person who is to be paid
How do you issue a check?
Let’s look at the Practical Money Skills overhead.
Follow the steps on the next slide.
Understanding the Job cont.
Steps to writing a check.
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
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
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
Always use ink. (WHY?)
Write legibly.
Use the current date. (Don’t Postdate)
Write the name of the payee.
Write the amount of the check in figures.
Write the amount of the check in words.
Enter a memo if applicable.
Sign your name.
Understanding the Job cont.
 What happens if you make a mistake?
– Panic?
– Throw the check away?
– Use wite out?
– Cross it out and do it again?
– NO!
– Write VOID across the check and retain it.
What is a check protector?
Let’s do a sample problem
Questions
Skill 5
 Using a check register
Goals for Skill 5
 How do I complete the check register for
my personal checking account?
 How do I write a check for less than one
dollar?
Understanding the Job
 When you write checks out with a stub, the
checks are attached to the stub and
everything is right in front of you.
 When you write checks for your personal
account, the checks and records are
separate.
 The records are put in a check register
using a three step method.
Let’s continue with the activity we already started
Understanding the Job
 What happens when you are told you
have “insufficient funds”?
– You don’t have enough money in your account
– You may bounce checks
– Your payees will be very upset with you
– You may not get loans or credit from the bank
– You may get fined and/or go to jail
Understanding the Job cont.
 How do we avoid this situation?
– Make more deposits
– Keep your checkbook accurate and up to date
– Don’t write checks if you know you don’t have any $
– Be aware of Check 21 policy?
Let’s try another problem 26-5 handout
Questions
Let’s Review
 Who are the three parties involved with a
check?
 What are the steps to follow when writing
out a check and filling in a register?
 What procedure do you follow when you
make a mistake writing a check.
 What are insufficient funds?
Try a few written exercises, p184 handout.
Practice Classwork/Homework
 Application Problems Job 25-4 Page 200201
 Points = 90
 Quiz tomorrow on vocabulary.
Skill 6
 Writing a check for
less than a dollar
Understanding the Job cont.

How do I write a check for less than one dollar?
–
1.
2.
3.

Use the steps from a typical check writing activity
except…
Use the words Only in front of the written words.
Cross out the word Dollars on the check.
Be sure to be accurate.
Why would I write a check for less than one
dollar?
–
–
Shipping and handling on an item
Copies from an archive
Let’s practice a few on p198 handout
Questions
Let’s Review
 What considerations must be followed
when using a check register?
 How do I write a check for less than one
dollar?
 What is the difference between the check
register and the check stub?
Practice Classwork/Homework
 Application Problems Job 25-1
Skill 7
 Reconciling
Bank
Statements
Goals for Skill 7
 How do I read a bank statement?
 How do I find which checks are
outstanding?
 How do I prepare a bank reconciliation
statement?
Vocabulary
 Bank Reconciliation
Statement
 Bank Statement
 Bank Statement
Balance
 Checkbook Balance
 Outstanding Checks
 Reconciled
Understanding the Job
 What do banks do with all those
cancelled checks?
– Throw them away?
– Send them back one by one?
– No, they send them back to you once a month.
 Along with the checks is a statement of your
account.
– It lists all the activity during the month
Understanding the Job cont.
 What information is on the statement?
– Bank statement balance
– Deposits
– Withdrawals
– Checks written
– Service Charges
– And the dates when all these activities happened
 What do I do with this information?
– Compare the bank statement balance with
– The Checkbook balance
Understanding the Job cont.
 What if they don’t match?
– You need to reconcile the account (bring into agreement).
– Using the bank reconciliation statement.
Let’s look at the sample problem on the
overheads for guidance.
Follow the steps on the next slide.
Steps to Reconcile
1. Compare the deposits.
2. Arrange the canceled checks in order.
3. Compare the canceled checks with the stubs.
4. Find the outstanding checks.
5. Prepare a bank reconciliation statement.
Let’s do “Learn by Doing”
handout together.
Questions
Let’s Review
 What are the parts of a bank statement?
 Which checks are outstanding?
 How do I reconcile a bank statement?
– What are the steps?
Practice Classwork/Homework
 Demonstration Problem Job 28
 Points = 45
 No Quiz tomorrow on vocabulary.
Skill 8
 Handling Outstanding
Deposits
Goals for Skill 8
 How do I prepare a bank reconciliation
statement when a deposit is outstanding?
 How do I use a bank-supplied
reconciliation form?
Vocabulary
 Outstanding Deposit
Understanding the Job
 What happens when you make a
deposit into your account and it
doesn’t appear on the bank
statement?
– Call the bank and complain?
– Figure the bank made a mistake?
– Maybe you didn’t put the money in the right account?
– No, you need to reconcile your checkbook.
Let’s take a look at the sample problem?
p221 handout
Understanding the Job cont.
 How can I use the reconciliation sheet
supplied to me by the bank?
1.
2.
3.
Compare the deposits
Complete the reconciliation.
Compare the canceled checks
Same steps we used to complete Job 28.
Check out the sample problem.
p222 handout
Questions
Let’s Review
 How do I prepare a bank reconciliation
statement when a deposit is outstanding?
 How do I use a bank-supplied
reconciliation form?
Practice Classwork/Homework
 Demonstration Problem Job 29-1
 Points = 40
 No Quiz tomorrow on Job 29 and vocabulary.
Skill 9
 Handling Bank
Service Charges,
Interest, and Errors
Goals for Skill 9
 How do I prepare a bank reconciliation
statement with bank service charges and
interest earned?
 How do I correct errors made in my
checking account?
Vocabulary
 Interest
Understanding the Job
 In the previous two jobs we have prepared
a bank reconciliation statement when
checks and deposits were outstanding.
– We recorded the activities but the bank had
not.
 Now, we need to make adjustments to our
checkbook for activities involving fees,
interest, and errors.
– The bank has recorded the activities but we
have not.
Steps to handle: Service Charges,
Interest, and Errors
1. Enter the heading and balances; handle
outstanding deposits and checks. (Jobs 28-29)
2. Subtract the service charge from the checkbook
balance.
3. Add the interest earned to the checkbook
balance.
4. Handle any errors.
5. Finish the bank reconciliation statement.
6. Correct your check stubs or check register.
Sooooo…
Item
Treatment
Outstanding Checks
Subtract from bank
statement
Outstanding Deposits
Add to bank statement
balance
Bank Service Charge
Interest
Subtract from
checkbook balance
Add to checkbook
balance
Questions
Let’s Review
 How do I prepare a bank reconciliation
statement with bank service charges and
interest earned?
 How do I correct errors made in my
checking account?
Practice Classwork/Homework
 Demonstration Problem Job 30-1
 Points = 25
 Quiz tomorrow on vocabulary.