This document provides instructions on how to properly manage and use a checking account. It explains the key parts of a check, how to correctly write checks including spelling out numeric amounts, the importance of avoiding writing checks to cash, how to record checks in a check register, how to reconcile the register with bank statements each month, how to endorse checks, and what overdraft protection is and how it works to protect against insufficient funds.

1. Mr. Elsesser
Introduction to
Financial Management

2.  Understanding the parts of your
checkbook will allow you to
correctly manage and use your
checking account :
 You need to be able to:
 Identify parts of a check
 Write checks
 Endorse Checks
 Know how to use Overdraft
Protection
 Carry out Checkbook Reconciliation

3. #11: Check Number:
 Usually a 3-4 for easy identification.
#2: Payee Line:
 Who the check is payable to.
#3: Numeric Amount:
 Check amount noted numerically (# form).
#4: Written Amount:
 Spelled out amount of dollars/cents paid.
#5: Memo:
 Quick comment remark about check.
 (What is it for? Account number of bill being paid)
#6: Date:
 Today’s Date—check good for 6 months.
#7: Signature:
 Your signature. Protects against fraud
#8: Bank Information:
 Your bank information.
#9: Routing Transit Number:
 9 digit number used to route your check.
#10: Account Number:
 Your bank account number.
#1: Personal Information:
 Information about you, the account owner.
#12: Your Bank’s Fractional Number:
 Another version of routing number.

4.  There are several things you need to know
to be able to correctly write out checks:
 Writing out Numbers:
 $523.34
 Five Hundred Twenty Three Dollars 34/100
 $30.00
 Thirty Dollars or Thirty Dollars 00/100
 12,532.50
 Twelve Thousand Five Hundred Thirty-two
Dollars 50/100

5.  AVOID WRITING OUT CHECKS TO
CASH:
 When you write out a check to cash,
it is treated like cash.
 Anyone can cash it!
 Harder to cancel and track!
 Some banks and businesses will not accept.
 If you don’t know who to make check
out to, leave payee field blank.
 DO NOT SIGN CHECK UNTIL YOU FILL
IN PAYEE.

6.  Record Check in your
Check Register:
 Book that comes with your
check book to record deposits
and withdrawals.
 Some people do this electronically.

10.  Each month complete a
Checkbook Reconciliation:
 Check your register with the
monthly checking account bank
statement.
 Ensures your records of checks match up
with what the bank has recorded.
 Identifies non-deposited checks.
 As you verify each deposit/withdrawal,
check it off in register.

11.  You need to Endorse it:
 Signatures on the front and back
of check stating that both parties
agree to the amount being
transferred.
 Receiver of funds signs their name on the
back.
 Writer of check signs on front.

13.  Overdraft protection protects a checking account
against insufficient funds.
 Account balance could not cover written checks.
 Checks that can be cashed are called “bounced checks”
 Payee and Account holder will be assessed fees.
 This is a service you need to subscribe to—
not automatic.
 Can work 2 ways:
 1. Bank gives you a loan on the money owed
with an interest charge.
 2. You backup your checking account with a
savings account.
 Small fee will be incurred sometimes.