Chapter 23

Question 1

disclaimer

Answer 1

a denial of responsibility; a denial of a legal claim

Question 2

drawee

Answer 2

a bank or facility on which a check is drawn or written

Question 3

drawer

Answer 3

the person who writes a check

Question 4

e-banking

Answer 4

electronic banking via computer modem or over the internet

Question 5

endorser

Answer 5

the person who signs his or her name on the back of the check for the purpose of transferring title to another person

Question 6

holder

Answer 6

the person who presents a check for payment

Question 7

maker

Answer 7

any individual, corporation, or legal party who signs a check or any type of negotiable instrument

Question 8

m-banking

Answer 8

banking through the use of mobile devices, such as cell phones and wireless internet services

Question 9

negotiable

Answer 9

legally transferable to another party

Question 10

payee

Answer 10

the person named on a draft or check as the recipient of the amount shown

Question 11

payer

Answer 11

the person who writes a check in favor of the payee

Question 12

power of attorney

Answer 12

legal statement in which a person authorizes another person to act as his or her attorney or agent, the authority may be limited to the handling of specific procedures, the person authorized to act as the agent is known as the attorney in fact

Question 13

principal

Answer 13

a capital sum of money due as a debt or used as a fund for which interest is either charged or paid

Question 14

reconciliation

Answer 14

the process of proving that a bank statement and checkbook balance are in agreement

Question 15

uniform commercial code (UCC)

Answer 15

a unified set of rules covering many business transactions; it has been adopted in all 50 states, the District of Columbia, and most U.S. territories, it regulates the fields of sales of goods; commercial paper, such as checks; secured transactions in personal property; and particular aspects of banking, letters of credit, warehouse receipts, bills of lading, and investment securites

Question 16

types of checks

Answer 16

bank draft
cashier's check
limited check
money order
traveler's check
voucher check

Question 17

bank draft

Answer 17

check drawn by a bank against funds deposited to its account in another bank

Question 18

cashier’s check

Answer 18

a bank’s own check drawn on itself and signed by the bank cashier or other authorized official, also knowns as an officer’s or treasurer’s check

Question 19

limited check

Answer 19

a check may be limited in the amount written on it and the time during which it may be presented for payment (30, 60, or 90 days), a limited check often is used for payroll or insurance checks

Question 20

money order

Answer 20

sold by banks, some stores, and the US postal service; used to pay bills by mail when a person does no have a checking account
international money orders may be purchased for limited amounts-indicated in US dollars to send money abroad

Question 21

traveler’s check

Answer 21

designed for people who are traveling, because personal checks may not be accepted or carrying a large amount of cash might be inadvisable- they require 2 signatures from the purchaser, one at the time of the purchase and the other at the time of use

Question 22

voucher check

Answer 22

has a detachable voucher form, voucher portion is used to itemize or specify the purpose for which the check is drawn, used for the convenience of the payer and shows discounts and various other itemizations

Question 22

Accounting

Answer 22

The system of recording, classifying and summarizing financial transactions

Question 23

Bookkeeping

Answer 23

The recording part of the accounting process- must be done daily