Use of a Bank

2 Pages
132 Views

Department
Financial Accounting
Course Code
MGAB01H3
Professor
Liang Chen

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Description
Use of a Bank The use of a bank contributes significantly to a good internal control over cash. It acts as a safeguard for cash, a clearing for cheques, and a second set of records. To open a bank chequing account, the bank runs a credit check and requires the depositor to sign a signature card. The bank provides the depositor with a book of serially numbered cheques and deposit slips. Making Bank Deposits Each deposit must be documented by a deposit slip. Deposit slips are normally prepared in duplicate. The original is kept by the bank. The duplicate is stamped by the bank to establish authenticity, and then kept by the depositor. Electronic Funds Transfer To manually control and account for cash is an expensive and time-consuming process. Therefore, funds are more often transferred among parties as an electronic funds transfer. Writing Cheques A cheque is a written order signed by the depositor that directs the bank to pay a specified sum to a designated re
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