MANAGING YOUR PERSONAL FINANCE UNIT 5: Writing Checks, Maintaining a Register, and Reconciling a Bank Statement

DO NOW:a. What is the purpose of a checking

account? b. What kind of banking transactions

(activities) can you do with a checking account?

STANDARD:

5.2 Students will be able to simulate maintaining a checking account for a month (including writing checks, maintaining a check register and reconciling a bank statement).

GOALS OF THE LESSON

I can correctly complete a check for the payment of an expense.

I can make entries in a check register to record checks, ATM transactions, Debit Card transactions, and deposits.

UNIT VOCABULARY Checking Account-A bank account at a

financial institution that allows for withdrawals and deposits. Money may be withdrawn using checks, automated cash machines (ATMs) and electronic debits, among other methods.

VOCABULARYCheck-a written order directing a bank to

pay money; drawn by one person or bank on another; decreases your current balance

Check register-a record of all transactions (activities of a bank account)

VOCABULARY Deposit-when money is added to your

account (increases your current balance)

ATM withdrawal-when money is taken out of your account through electronic means (there may be a fee); decreases your current balance

VOCABULARYDebit card withdrawal-used to make purchases; money is taken out of your account (decrease the amount in your account)

PARTS OF A CHECK

Bank Routing #

Account # Check #

Your Name/

Address

Bank’s Name/

Address

PLEASE LABEL PARTS OF THE CHECK

Name- Date- Number in Digits- Number in words- Signature- Routing number-

Account Number-

Check Number-

THE CHECK REGISTERRecord of all transactions (banking activities) that affect your checking account including: deposits checks debit card transactions ATM/cash withdrawals Direct deposits EFT transactions

HOW ARE TRANSACTIONS ENTERED IN A CHECK REGISTER?

LET’S RECORD SOME BANKING TRANSACTIONS TOGETHER…(SEE BANKING UNIT: WRITING CHECKS AND USING A REGISTER HANDOUT)

YOUR TURN…RECORD THE NEXT 5 BANKING TRANSACTIONS (AND CHECK YOUR REGISTER BALANCE WITH YOUR INSTRUCTOR

TICKET OUT THE DOOR

DO NOW:Quick Check of

Banking Transactions(see Handout)

GOALS OF THE LESSON

I can identify key components of a Bank Statement.

I can reconcile my check register.

MORE VOCABULARYBank statement- a statement of transactions (activities) in a bank account. The bank statement shows all deposits, checks, other withdrawals, and bank fees for a particular period of time.

MORE VOCABULARYBank Reconciliation-process to help you verify that information on a bank statement and a check register agree and helps you locate, fix errors, and adjust your balance.

MORE VOCABULARYOutstanding deposit-a deposit that has been recorded in your register but has not yet been processed by the bank.

MORE VOCABULARYOutstanding check-a check that has been recorded in your register bust has not yet been processed by the bank.

MORE VOCABULARYService fee - an amount that the bank charges you for using the checking account (some banks waive this fee if you keep a minimum balance in your account).

THE BANK STATEMENT

BANK RECONCILIATION -PROCESS TO HELP YOU VERIFY THAT INFORMATION ON A BANK STATEMENT AND A CHECK REGISTER AGREE AND HELPS YOU LOCATE, FIX ERRORS, AND ADJUST YOUR BALANCE

Look at Reconciling a Bank Statement (Working Together Handout). Compare the balance of bank statement to the balance of your check register. Do they agree? If not, why not?

BANK STATEMENTS AND RECONCILITATION – WORKING TOGETHER

DO NOW:

Complete the BANK STATEMENTS AND

RECONCILITATION On Your Own

TICKET OUT THE DOOR

DO NOW:Identify reasons why bank statement and check registers may not agree. How many can you list?

1, 2, 3, 4, 5 … ?

GOALS OF THE LESSON

I can identify reasons why bank statements and check register balances do not agree.

I can complete a banking project that includes banking transactions and reconciling a bank statement.

Reasons why bank statements and check register balances do not agree:

• Missing transaction. • You forgot to enter it.

Reasons why bank statements and check register balances do not agree:• Missing transaction (cont.) The bank

statement was prepared before the transaction was recorded by the bank (outstanding checks or deposits).

Reasons why bank statements and check register balances do not agree:• Missing Transactions (cont.) Bank

fees were charged by the bank.

Reasons why bank statements and check register balances do not agree:• Errors in math or numbers were

switched in the register (usually your errors).

EVEN MORE VOCABULARY

EFT (Electronic Funds Transfer)-money is electronically moved from one account to another.

Direct Deposit (a type of EFT)-money is electronically deposited in your account, increasing your balance. (Example: Employers electronically deposit the employee’s pay directly into the employee’s bank account.)

EVEN MORE VOCABULARY

Overdraft check (or returned check)- Returned to the writer because of insufficient funds in the account to cover the check (a very expensive mistake as high fees are charged).

EVEN MORE VOCABULARY

DO NOW:Complete Banking Project 1

DO NOW:Complete Banking Project 2