financial document- Admin management

7/27/2019 financial document- Admin management

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FINANCIAL

DOCUMENTSChapter 18


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OBJECTIVES

Students should be able to:

know the electronic technology usedin the banking industry,

know banking records andprocedures,

know payroll and other tax laws,understand investment terminology.


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INTRODUCTION

All companieskeep:

- Banking

- Accounting

- Payroll

- Investment and

- Insurancerecords


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ELECTRONIC TECHNOLOGY

& THE BANKING INDUSTRY

The mostimportant change

in the bankingindustry in the lastfew years has beenin the use of

electronictechnology.


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ELECTRONIC BANKING

ELECTRONIC FUNDS TRANSFER(EFT)

- Obtain money

- Transfer funds from one accountto another

- Deposit money- Pay bills


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MAIN FORMS OF EFT

Automated Teller Machines (ATMs)

Use EFT card and personal

identification number (PIN).

Sophisticated Kiosks

May include interactive video,telephone, electronic capture ofsignatures, open accounts, and

regular ATM services.


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MAIN FORMS OF EFT contd

Smart Cards (Stored Value Cards)

May be disposable e.g. prepaid phonecards or reloadable e.g. student cards

used for photocopies etc.

Direct Withdrawals authorize banks or

credit unions to automatically makepayment on your behalf at prescribedtimes for mortgages, insurance premiums,utilities etc.


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Direct Payroll Deposits ie directdeposit of employees pay to theirbank account.

Advantages: eliminates the time andexpense of writing cheques, reducepossible theft or loss of cheques,

payroll cheques may be deposited inthe bank even when employees areon leave.


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Computer systems and softwarepackages e.g. online banking

Allows users to transfer moneybetween accounts, check savings andchequing account balances,determine what cheques have been

cleared, make bill payments.


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Debit Cards a type of automatedpayment of bills. They may be usedat ATMs to make deposits,

withdrawals, transfer from oneaccount to another, etc.


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Debits cards may be:

i) online Require the use of a PINto initiate the transaction. Onlinedebit transactions are done realtime.

ii) offline The transactions are notreal time and usually require a fewdays for the payment transfer.


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DEBIT CARDS contd

Advantages: Consumer - a convenient andsafe way to make purchases withouthaving to carry cash or cheques, reducebank charges, etc.

Merchants - can access funds from salesearlier, reduced bank charges, reducednumber of bad cheques, etc.

Banks - a reduction in the number ofcheques to be processed, can now providea wider range of services to customers.


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BANKING RECORDS AND

PROCEDURES

Cheques

An order by the depositor (drawer)directing the bank to pay money to adesignated person or firm (payee).


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WRITING CHEQUES

Figures to be written as close aspossible to the printed dollar sign

Start amount in words as far aspossible to the left


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WRITING CHEQUES contd

Draw a line through any excessspace on the line

Never erase or change a cheque void it and the stub

Fill out the cheque register and stub

before writing the cheque


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ENDORSEMENTS

An endorsement is a writtensignature by the holder of a chequefor the purpose of transferring

ownership.

The endorsement must be written atthe back of the cheque.


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TYPES OF ENDORSEMENTS

Blank requires only the signature of thepayee ie. J. McKoy

Full transfers ownership to anotherperson or business. The name of theperson to whom the cheque is to betransferred is written before theendorsers signature

e.g. Pay to the order of John Brown. Thecheque cannot be cashed without thespecified payees signature ie. J. McKoy


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TYPES OF ENDORSEMENTS

contd

Restrictive transfers ownership fora specific purpose. Should be usedwhen sending cheques through the

mail for deposit.

eg. For deposit

J. McKoy


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BANK RECONCILIATION

This is completed to account for thedifference between the bankstatement balance and the cheque

book balance

Used to correct any errors that mayhave been made


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SPECIAL BANK SERVICES

Certified cheques Business orpersonal cheque that is guaranteed by

the bank on which it is drawn.Sufficient funds must be available inthe drawers account.


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CERTIFIED CHEQUES contd

Certified is stamped on the face ofthe cheque and an official signatureadded. The drawers account is

immediately charged with theamount on the cheque. A small feeis usually charged to certify a

cheque.


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SPECIAL BANK SERVICES contd

Cashiers cheques Issued by the bankand drawn on the banks own funds. Acashiers cheque is purchased by giving

the bank cash or cheque for the amount ofmoney desired. The cheque may be madeto the purchaser of the cheque whoendorses it to the person to whom

payment is to be made or the cheque maybe made payable directly to payee.


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SPECIAL BANK SERVICES contd

Bank money orders Sold by the bankand states that a certain amount of moneyis to be paid to the person named on themoney order

Travelers cheques Facilitates paying forexpenses when traveling

Safe-Deposit Box Used to store articlesof value or important papers forsafekeeping at the bank


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PAYROLL LAWS

Being familiar with payroll laws andregulations will help the officeprofessional understand:

- the day-to-day operations of abusiness

- the deductions that are takenfrom gross earnings


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PAYROLL LAWS USA/Jamaica

Fair Labour Standards Act

Federal Insurance Contribution Act (SocialSecurity)

Federal, State, and Local Income Tax Unemployment Compensation Tax

PAYE (Income Tax)

National Insurance Scheme (NIS)

National Housing Trust (NHT)

Education Tax


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OTHER TAXES USA/Ja.

Property Tax

Sales Tax/ General Consumption Tax

License Tax


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INVESTMENTS

The office professional needs to havean understanding of investmentterminology.

This knowledge will help whendealing with reports that containinvestment terms.


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INVESTMENTS contd

Investments include:

- Stocks common, preferred

- Bonds

- Mutual Funds

- Individual Retirement Arrangements(IRAs)

- Etc.


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SUMMARY

Electronic Banking technology

Advantages of Direct Payroll Deposit

Types of cheque endorsements

Special bank cheques

Payroll Tax Laws USA/Ja.

Other taxes USA/Ja.

Investment instruments

Stock classification

Documents

financial document- Admin management