Chapter One Flashcards
Where must a business place the cash it receives and why
Bank, so the bank can hold and safeguard money for them
A positive bank balance shown on a bank account is ?
A credit
What is an overdraft shown as on the bank?
A debit
What is ‘counter credit’ in the bank statement
Money put into the bank with a paying in slip
How many parties are included in a cheque
Drawee
Payee
Drawer
Cheque : what is a drawee
There bank that has issued the cheque and will have to pay it
Cheque: what is a drawer
The person who is writing and signing the cheque to make a payment
Cheque: what is a payee
The person who the cheque is being paid to
What is the clearing system with a cheque
A system set up resulting in a three day delay between paying a cheque and accessing the money
What are cheques displayed as when using a paying in slip
Counter credit
What is a dishonoured cheque ?
A cheque that has not been paid as expected by the bank on which it is drawn
Why might a cheque be dishonoured by the drawee
Insufficient funds in the drawers account
What happens with a dishonoured cheque
It is sent back to the payee so payment can be pursued another way
How does a credit card effect bank account
It doesn’t effect bank until it’s been paid off
What is a bank draft
A non cancellable cheque drawn on the back rather than the customers account
