Chapter 9 (“Cash Receipts, Cash Payments, and Banking Procedures”)

Question 1

postdated check

Answer 1

A check dated some time in the future

Question 2

Canceled checks

Answer 2

A check paid by the bank on which it was drawn

Canceled checks are proof of payment. They are filed after the bank reconciliation is complete.

Question 3

3 Types of checks

Answer 3

A blank endorsement is the signature of the payee that transfers ownership of the check without specifying to whom or for what purpose. Checks with a blank endorsement can be further endorsed by anyone who has the check, even if the check is lost or stolen.

A full endorsement is a signature transferring a check to a specific person, business, or bank. Only the person, business, or bank named in the full endorsement can transfer it to someone else.

The safest endorsement is the restrictive endorsement. A restrictive endorsement is a signature that transfers the check to a specific party for a specific purpose, usually for deposit to a bank account. Most businesses restrictively endorse the checks they receive using a rubber stamp.

Question 4

electronic funds transfers (EFT)

Answer 4

An electronic transfer of money from one account to another.

Question 5

payee

Answer 5

The person or firm to whom a check is payable.

Question 6

drawee

Answer 6

The bank on which a check is written