Dollar Scholar Game
INTRODUCTION TO BUSINESS
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INTRODUCTION TO BUSINESS
© SOUTH-WESTERN PUBLISHING
Money
Characteristics:
Scarce
Durable
Portable
Divisible
Government calls it “legal tender”
Unit of Account – measure to decide the
price of something and provides comparison
Store of Value – can be saved and used in
the future
INTRODUCTION TO BUSINESS
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INTRODUCTION TO BUSINESS
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Counterfeiting
Costs our government millions
Prevention:
Watermarks
Color shifting ink
Security thread
Makes it hard to copy or counterfeit
INTRODUCTION TO BUSINESS
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Backup Plan
Checks
Electronic Funds Transfer (EFT)
INTRODUCTION TO BUSINESS
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The Business of
Banking
INTRODUCTION TO BUSINESS
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How Do Banks Make $?
By charging for loans
By charging fees for services
By investing depositors money
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Types of Financial
Institutions
Deposit Type
Non Deposit Type
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BANKS AND OTHER
DEPOSIT-TYPE INSTITUTIONS
Commercial banks
Savings and loan associations
Mutual savings banks
Credit unions
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Deposit Type
Commercial Banks
Offer wide range of services
Most common financial institution
Savings and Loans
Specialize in savings accts and home loans
Now called Savings Banks
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Mutual Savings
Mainly for savings and home loans
Owned by depositors; profits go to them
Located mainly in Northeastern US
Credit Unions
User-owned, not for profit institution
Members only; same company, profession,
etc.
MSU has a Credit Union
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NONDEPOSIT
FINANCIAL INSTITUTIONS
Life insurance companies
Investment companies
Consumer finance companies
Mortgage companies
Check-cashing outlets
Pawnshops
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Non Deposit Type
 Life Insurance Companies
 Investment Companies
 Consumer Finance Companies
 Provide loans for durable goods like furniture, cars,
appliances
 Mortgage Companies
 Check Cashing Outlets
 For people with no checking acct
 Offer other services
 Pawnshops
 Loan money based on your valuables like jewelry
 Highest interest rate.
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Deposit vs Non Deposit
Deposit Type
 Commercial banks
 Savings and loan
associations
 Mutual savings
banks
 Credit unions
INTRODUCTION TO BUSINESS
Non Deposit Type
 Life insurance
companies
 Investment companies
 Consumer finance
companies
 Mortgage companies
 Check-cashing outlets
 Pawnshops
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Types of Financial
Services
Accepting Deposits
Transferring Funds
EFT – Electronic Funds Transfer
Lending Money
Storing Valuables
Safe Deposit Boxes
Used for jewelry, bonds, certificates,
insurance policies
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Types of Financial
Services
Financial Advice and Investment
Services
Investments – savings that are put to work
to earn money
Managing Trusts
Used by the very young or elderly
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FINANCIAL INSTITUTIONS
AND ECONOMIC GROWTH
Banking services are commonly used to
 Build homes
 Start new businesses
 Plant crops
 Finance educations
 Buy goods
 Pave streets
 Build hospitals
 Buy new business equipment
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Who Regulates
FDIC – Federal Deposit Insurance
Corporation
Helps regulate banks and other financial
institutions
Insures all accounts in the same name up
to $250,000.
Credit Unions are regulated by the NCUA –
National Credit Union Administration.
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THE FEDERAL
RESERVE SYSTEM
Structure of the Federal Reserve
System
Federal reserve activities
Video
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INTRODUCTION TO BUSINESS
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OPENING A
CHECKING ACCOUNT
Benefits of checking accounts
Convenience and ease of making
payments
Safety to make payments with less risk
than using cash
Proof of payment
A record of finances for managing your
money
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TYPES OF CHECKING
ACCOUNTS
Shop around for the best deal….
Regular checking accounts
Student accounts – may offer deals
Interest-earning – require a minimum
balance
Special checking accounts – fee for
each check written
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Compare Checking Accts
Criteria
What type of
account?
Minimum
balance?
Monthly fees?
Interest earning?
Checks vs debit
card?
INTRODUCTION TO BUSINESS
Research
Checking account
options?
Pick best account
for students
Explain benefits
and costs
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COMPARING CHECKING
ACCOUNTS
Minimum balance
Interest rate earned, if any
Monthly service charge
Fees for other services, such as printing
checks and stop payment orders
Other restrictions
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ELECTRONIC BANKING
E-banking services
Automatic teller machines
Payments at the point-of-sale
Direct deposit
Automatic bill payments
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INTRODUCTION TO BUSINESS
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EXAMPLES OF ELECTRONIC
BANKING ACTIVITIES
ATM
Check account balances

Withdraw cash

Made deposits

Transfer funds

PREAUTHORIZED
ONLINE


View account history

Pay bills

Apply for loans

Manage investments

Accept direct deposits

Pay bills automatically

Make debit card purchases
POINT-OFSALE



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ELECTRONIC
PAYMENT OPTIONS
Debit card transactions
Online payments
Stored-value cards
Smart cards
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BANKING IN THE
FUTURE
Financial services combined with
wireless technology
Personalized systems for obtaining,
transferring, and using funds
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CERTIFIED CHECKS
Personal check for which a bank has
guaranteed payment
Certification stamped on face
Signed or initialed by a bank officer
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CASHIER’S CHECKS
Check that a bank draws on its own
funds
Costs the amount of the check plus a
service fee
More acceptable than the personal
checks
SLIDE 31
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TRAVELER’S CHECKS
Special forms designed for making
payments when away from home
Require your signature in two places
Cash a check or pay for a purchase
Commonly accepted throughout the
world
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MONEY ORDERS
Form of payment that orders the issuing
agency to pay the amount printed on
the form to another party
A bank money order
A postal money order
An express money order
A telegraphic money order
SLIDE 33
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USING A
CHECKING ACCOUNT
Check-writing procedures
Elements of a check
The check register
Writing a check
Proper check writing
Stopping payment
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PARTS OF A CHECK
SLIDE 35
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Writing Dollars & Cents
INTRODUCTION TO BUSINESS
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Check Writing Practice
INTRODUCTION TO BUSINESS
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TIPS FOR GOOD
CHECK WRITING
 Write checks only on the forms provided by your bank.
 Write checks in ink.
 Only write checks if you have money in your account to
cover them.
 Use the current date
 Avoid making checks payable to Cash or to Bearer.
 Always fill in the amount.
 Void checks on which you make errors.
 Record every payment for your checking account,
whether the payment is by check or EFT.
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Writing a Check
page 121
7
8
9
10
11
12
7. Write the date.
8. Write to whom the check is to
be paid.
9. Write the amount in figures.
39
INTRODUCTION TO BUSINESS
10. Write the amount in words.
11. Write the purpose of the check.
12. Sign the check.
LESSON 5-1
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Check Writing Quiz
Check #123 to Mrs. McDowell for
$35.00
Check #124 to Murray Electric for
$128.19
Check $125 to Huck’s for $64.23
Check #126 to Tom’s Pizza for $16.94
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THE FIRST DEPOSIT
Signature card
Deposit slip
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Deposit Slip
SLIDE 42
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Keeping your balance
Use a check register or checks
with stubs attached.
Fill in register or stub first.
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Check Register
INTRODUCTION TO BUSINESS
587
21
466
46
398
30
398
30
598
30
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Check Register Activity
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Enter these transactions on
the blank check register
•The beginning balance of your checking account is $715.50
•You write check 200, on November 7th to Julie Campbell for $215.00 for her
painting services.
•On November 8th you wrote check 201 to Kelly’s Diner for $12.25 for some lunch.
•You deposited your paycheck from Jim’s Repair Shop on November 10th for $280.00.
•You make an ATM withdrawal on November 11th for cash for $140.25
•You wrote check number 202, on November 12th for lawn maintenance to Grass
Cutters for $75.00
INTRODUCTION TO BUSINESS
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Record all transactions that affect your account.
Number
Payment
or Debit (-)
Date
Description of Transaction
200
Nov. 7
Julie Campbell
215
201
Nov. 8
Kelly’s Diner
12
Nov. 10
Deposit Pay Ck
ATM
Nov. 11
ATM Withdrawal for cash
140
202
Nov. 12
Grass Cutters
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INTRODUCTION TO BUSINESS
Deposit or
Credit (+)
Balance
$715
50
00
500
50
25
488
25
768
25
25
628
00
00
553
00
280
00
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TYPES OF
ENDORSEMENTS
Blank endorsement
Full endorsement
Restrictive endorsement
Special endorsement
Two signatures required
Restrictive endorsement
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ENDORSEMENTS
page 120
Blank Endorsement
Special Endorsement
Restrictive Endorsement
49
INTRODUCTION TO BUSINESS
LESSON 5-1
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SAMPLE
ENDORSEMENTS
SLIDE 50
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Using checks with stubs
•Fill out stub first.
•Carry balance to next stub.
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CHECK
STUB
101
DATE
TO
FOR
$
20
BALANCE FOR’D
DEPOSITS
TOTAL
THIS CHECK
OTHER
DEDUCTIONS
BALANCE FOR’D
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THE RECONCILIATION
PROCESS
Bank statement information
Determine checks paid
Find differences
Calculate adjusted balance
SLIDE 53
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MONTHLY ACCOUNT
STATEMENT
SLIDE 54
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RECONCILIATION FORM
SLIDE 55
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