Budgeting & Finance UnitPersonal & Business Record Keeping

Concept 3

LEQ 1What are the basics of record keeping for personal and business accounts?

Personal & Business Record KeepingChecking Accounts - A written order

requiring the bank to pay previously deposited money to a 3rd partyWhen you write a check your

identification should be requested When you cash or deposit a check you

must endorse itYou should reconcile your account

each month

Personal & Business Record KeepingLoans – Business must clearly state

purpose of loan and provide financial evidence that they can repay the loanCollateral

Property a borrower pledges to assure repaymentUnsecured loan

Not backed by collateralSecured loan

Backed by collateralMortgage

Agreement between bank and customer for purchase of a house

Personal & Business Record KeepingInterest Rates – this is the way banks

earn money; when loaning money they charge interest for the life of the loanRates are based on supply &demand for the

money at the time of the loanRates can change dailyPrime Rate is the lowest rate at which banks

loan money and is given to people with the best credit on large sums of money

Personal & Business Record KeepingDirect Deposits – is an EFT of a paycheck

directly from the employer’s bank to the employee’s bankAllows immediate use of fundsNo waiting in line to cash or deposit checksStill will receive a hard copy of your check with

your tax info. Present

Personal & Business Record KeepingATM Transactions – Automated Teller

Machine; a computer terminal that enables customers to deposit, withdraw, or transfer funds with your cardThey are usually located in convenient places

for use at any time They also help banks lower their operating

expenses by reducing the number of employees needed

Sometimes a withdrawal fee may apply

Personal & Business Record KeepingLEQ 1: What are the basics of record keeping for personal and business accounts?