4.02 C
Check Writing & Endorsements
Students will understand and apply steps in writing checks &
appropriately endorsing checks.
Parts & Parties to a Check/Share Draft
Drawer’s Name & Address
Joint Account
3. Payee
ABA #
Check
Number
2. Check
Date
Melanie Paige
Charles Paige
619 Main Street
Raleigh, NC 27601
319
2-131/1034
July 16, 2010
Pay To the Order of _____Donnie Tatum______________________$100.50
_One hundred and 50/100 ---------------------------------------------------DOLLARS
4- numeri
State Credit Union
5- amount in words
For _______________
Charles Paige
2131/1034:78434 234320
100.50 07-18-2010 2251
6. Memo
Bank Name - Drawee
7. Drawer’s Signature Last item completed on check!
MICR Banking #s
Parties to a Check/Share Draft*

Drawer



owner of the account who
signs the check
Drawee

bank or other financial
institution that pays a check
presented for payment
Payee


person to whom the check
is written


Checking accounts are a
legal contract between
drawer and drawee.
Drawer demands action
from the drawee.
Examples of demands:


Process check from
account
Accept deposits into
account
*Share Drafts are issued by credit unions, but process like a check.
Check Writing Procedures
1.
2.
3.
4.
5.
Write information in the check register first,
(ensure checks are written in numerical order)
Write the date the check is written.
Write the payee’s name.
Write in the numerical amount of the check.
Write in the amount of the check in words.
*Numeric and amount in words should match
6.
7.
Write in the purpose of the check in memo
section
Sign the check using authorized signature.
Keep Accurate Records!
Check Register Balance
To keep a continuous or running balance:
Start with beginning balance , then record
+ deposits
- checks written
- debit card transactions
- ATM transactions
- service fees charged
= Ending Balance

How Do I Know the Amount in my Checking
Account?
Keep a Check Register or Check
Stub* Continuous Balance
a.
Subtract checks written (or
debit card transactions) from
balance
b.
Add deposits to balance
c.
Keep a running balance after
writing checks or making
deposits
*Check stub is part of check
that stays in check book.
Check details and a
continuous “running” balance
is maintained.
•
Check Register/stub is
YOUR documentation of
how much money is in your
account?
•
What if mistakes are made?
You will make corrections
when you reconcile
(balance) bank statement
•
Check Endorsements

Definition: Signature of the payee on the back of a check, may
include additional instructions
 allows the payee to cash the check, deposit the check or
transfer payment of the check to someone else.
Different types of endorsements:
What type of endorsement should I use ?



1. Blank – to cash check
2. Restrictive – to deposit check into account, or
3. Full/special – to transfer payment of the check to someone else
* Endorsement provides legal proof that the payee received the
funds
7
Endorsements
How should a check be endorsed?



Endorser (payee who is signing)
should sign the check the way it is on the front of the check
and
if the name is misspelled, correct the signature directly up
under the first endorsement
Blank Endorsements



Signed with endorser’s
name only (endorser is
payee from front of
check)
Can be cashed by
anyone who holds the
check with a blank
endorsement!
Don’t use blank endorsement
before you are ready to cash or
deposit!
Should match
payee’s name
X
Jane Doe
DO NOT WRITE BELOW THIS LINE
Special/Full Endorsement



Transfers payment of a check
to someone else.
Payee signs check , then writes
“pay over to” another person
Can be used to make payment on
a debt
 Juan is payee on check
 Juan owes Maria money
 Juan transfers payment to
Maria.
Debt = money owed
Might also endorse:
Juan Delgado
pay over to
Maria Fernandez
Full/Special Endorsement Example




Transfers payment to
someone else
Payee signs the check
over to another person
to receive payment
X Pay to the order of
Jane Doe
John Doe
Who was payee on
check? John
Who was the check
transferred to? Jane
DO NOT WRITE BELOW THIS LINE
11
Restrictive Endorsement




Limits use of the check
so it can be deposited only
to endorser’s account.
Safest type of
endorsement
Cannot be cashed by a thief
or someone who finds the
check
Best to use when mailing a
check for deposit or when
using the ATM for deposit.
Stamp often used by businesses
for speed and convenience