Performance Task 2 – Lesson 7

1. What is a bank statement and discuss the importance of a bank statement to a depositor. (10 points)

A bank statement is an official synopsis of monetary exchanges happening inside a given period for
each ledger held by an individual or business with a monetary establishment, also alluded to as a record
explanation. However, they can help account holders track their funds, distinguish blunders, and perceive
ways of managing money. A bank statement is a report provided by the bank to the depositor detailing the
balance of the account and the operation of the bank over time. If people or businesses deposit money into
bank accounts, the bank is said to be the depository, and the people or firms making the deposits are generally
referred to as the depositors. Bank statements usually include the depositor's name, address, account
number, date, and bank name. A bank statement is often referred to as a statement of accounts. It indicates
whether the bank is liable for the money of the account holder. Bank statements are a wonderful way to help
account holders manage their assets. They will help account holders monitor their accounts, detect mistakes,
and understand spending trends.

2. What is a check and who are the parties involved in the issuance of a check? Discuss the role of each party. (10
points)

A check is a type of document mostly used by businessperson and entrepreneurs to order the bank to
state a sum of cash from the drawer's account to the recipient. A check can be a verified instrument or a bill
of exchange wherein a drawer deposits without carrying a huge amount of money. The issuance of payment
was inscribed in a cheque paper, mainly containing the monetary amount, the payee's name, date of issuance,
check number at the upper right, and the signature of the drawer. The validity of the check can be estimated
within its issuance time. A check must be deposited before it is 6 months or more after it has been written, or
else it will be considered a stale check. However, a check can also have a common instruction on what way it
should be redeemed by the payee. A cross-check, a check with a two-parallel line on its upper left side,
indicates that the cash must deposit directly to the bank account and not on the over-the-counter transaction.
And finally, in case of a visible erasure in the check, a signature of the drawer must be applied to verify the
agreement. On the other hand, there are three parties involving check transaction:
• Drawer- the party who writes the check then requests that his/her bank pays the specific amount of
money to some third party.
• Payee- this party is the receiver of the payment from the exchange.
• Drawee- this party is usually a bank or any financial institution that is responsible to pay a certain
amount of money from the drawer.
3. Why do companies issue checks? (10 points)

Companies issues checks because there are many advantages in using it in handling the companies'
money. One of the advantages of using checks is that it is more convenient because it can be used in paying a
large amount of money without needing to bring plenty of money. They also choose to use checks because it
is much safer for example when you accidentally misplace the money, there is a greater chance that the money
will be returned to you when you use a check because it guarantees the safety of the money to be transferred
to the recipient because no one can claim it other than the drawer. The company can also identify the date
when the recipient claimed the payment. It is also easy for the company to keep track of their balance/funds
in their bank account, and they could also monitor if the money has been received or yet to be received by
the recipient. They also use checks because they can duplicate the checks for them to have it encoded on the
company's record. The company also issues checks to prevent them from getting fraud because they can
report it as a missing check then the other party would not be able to claim the money from the check.

4. Discuss the types of bank accounts normally maintained by a business and differentiate. (10 points)

The two types of bank accounts that are normally maintained by a business entity are saving accounts
and checking or current accounts. Savings Accounts are the bank accounts that usually helps the depositor to
securely accumulate money or withdraw funds through limited transactions while earning interest. It offers
considerably higher interest rates than most as it induces depositors to save money to address their financial
needs, such as investments and any future purchases. Some savings accounts typically need a low minimum
balance to be upheld; otherwise, the bank would have to charge fees. All transactions are accomplished by
filling in the form issued by the bank. It also comes with a passbook that documents every transaction of the
depositor. On the other hand, Checking or Current Accounts are the type of accounts for entrepreneurs as the
withdrawals were made through the issuance of a check. Compared to a savings account that has a limitation,
withdrawals and deposits under a checking account were unlimited, making it convenient for its depositor to
have access to his or her account. This type of account has a low-interest rate, unlike a saving account, because
the money held by this type of account is typically not intended for saving. Transactions made through
checking account including deposits, checks paid, and the balance of the account was issued by the bank every
end of the month, making the use of a passbook unnecessary.
5. What is the difference between and deposit slip and a withdrawal slip? (10 points)

A withdrawal slip is used to withdraw money from the bank account without needing to use an ATM.
It contains the account holder's name, the account number, the date and amount of the withdrawal, and an
account holder's signature. This is mostly used when you do not have a debit card, you do not feel safe using
the ATM, or when the ATM is not working. For you to be able to claim cash using a withdrawal slip, you must
fill up a withdrawal slip and hand it to the teller, and the teller will give you the money from the bank account
you have written. On the other hand, a deposit slip is used in depositing funds to one's bank account. A deposit
slip contains the date, depositor's name, depositor's account number, and amount to be deposited. It serves
as evidence or proof that the bank already accepted receipt of the customer's funds. The second use of this is
it provides quality protection to the bank and its client. Banks are using them to help maintain a recorded
ledger of funds deposited during the day and to guarantee at the end of the business day, there are no
unaccounted deposits. A deposit slip for bank customers functions as a copy or documentation that the bank
paid for the funds correctly and deposited the right amount into the correct account.

GROUP 1
Balbin, Patricia Estrella, Jhoanna
Baluyot, Tristan Reynoso, Chinah Zyra
Bengil, Thea Sarmiento, Hazel
Borromeo, Ezekiel Tapang, Kyla
Elbit, Julianne Tuyor, Ariane
Estolonio, Aliah Vernel, Sheena