Universidad Tecnológica de Panama

Facultad de Ciencias y Tecnología

Licenciatura en Comunicación Ejecutiva Bilingüe

Melanie Palma 8-964-1420

Finanzas y Bancas (Ingles)

Vocabulary of Banking Terms

Código de asignatura 8603

Profesora: Vanessa Lay

Grupo: 1EB122
 TECHNOLOGICAL UNIVERSITY OF PANAMA
FACULTY OF TECHNOLOGY AND SCIENCE
ASSISGMENT NO.2
 

Name: Melanie Palma Delivery Date: Monday, September 5, 2022

Group: IEB122    Professor: Vanessa Lay  SCORE: 20 Pts.

DIRECTIONS:

A. Prepare a table below provides definitions for the banking terms in
clued the Reconciliation Bank Statement 
B. Give one or two examples of these banking terms

The following defintions for the banking terms: 

1. Bank Statement:
A bank statement is a document (also known as an account statement) that is
typically sent by the bank to the account holder every month, summarizing all the
transactions of an account during the month. Bank statements contain bank
account information, such as account numbers and a detailed list of deposits and
withdrawals.

2. Outstanding Check: Give a Example 
Is a check payment that is written by someone but has not been cashed or
deposited by the payee. The payor is the entity who writes the check, while the
payee is the person or institution to whom it is written. An outstanding check also
refers to a check that has been presented to the bank but is still in the bank’s
check-clearing cycle.
An outstanding check represents a liability for the payor. The payor must be sure to
keep enough money in the account to cover the amount of the outstanding check
until it is cashed, which could take weeks or sometimes even months.
3. Outstanding Deposits: Give a Example 
An outstanding deposit is that amount of cash recorded by the receiving entity, but
which has not yet been recorded by its bank. All outstanding deposits are listed as
reconciling items on the periodic bank reconciliation prepared by the receiving
entity. These deposits are subtracted from the book balance of the receiving entity
to arrive at the bank balance.

4. Bank Service Charge: Give a Example
A bank service charge, therefore, is a fee charged by the bank to its customers. It
includes the amount debited to the customer’s account for the services that the
bank provides.

5. Electronic Funds Transfer System: Give a Example  
(EFTS) is a transfer system in which money can be transferred to business or
individual accounts without requiring paper money to change hands. Electronic
funds transfer systems are used for payroll payments, debit or credit transfers,
mortgage payments or other payments.

6. Bankcard:
A plastic card issued by a bank which enables a customer to withdraw money at an
automated teller machine.

7. Funds:
A fund is a pool of money that is allocated for a specific purpose.
A sum of money or other resources whose principal or interest is set apart for a
specific objective

8. Check:
A check is a written, dated, and signed instrument that directs a bank to pay a
specific sum of money to the bearer. The person or entity writing the check is
known as the payor or drawer, while the person to whom the check is written is the
payee. The drawee, on the other hand, is the bank on which the check is drawn.

9. Check Stub:
A check stub is attached to a check, and provides the detail regarding the amount
paid. The contents of a check stub typically include the invoice number paid and
the amount paid, which sums to a grand total paid. This information is used by the
recipient to match cash receipts against invoiced amounts in its accounting system,
and so reduces the volume of calls back to the accounting department, asking
about the nature of payments made.
10. Deposit:
A deposit is a financial term that means money held at a bank. A deposit is a
transaction involving a transfer of money to another party for safekeeping.
However, a deposit can refer to a portion of money used as security or collateral
for the delivery of a good.

11. Certified Check:
A certified check is a type of check for which the issuing bank guarantees that
there will be enough cash available in the holder's account when the recipient
decides to use the check. A certified check also verifies that the account holder's
signature on the check is genuine.

12. ACH:
In banking, "ACH" stands for "automated clearing house," which is a network that
coordinates electronic payments and automated money transfers. ACH is a way to
move money between financial institutions without using paper checks, wire
transfers, credit card networks, or cash.

13. Debit Note:
A debit note is a document used by a vendor to inform the buyer of current debt
obligations, or a document created by a buyer when returning goods received on
credit. The debit note can provide information regarding an upcoming invoice or
serve as a reminder for funds currently due. For returned items, the note will
include the total anticipated credit, an inventory of the returned items, and the
reason for their return.

14. Credit Note:
A credit note or credit memo is a commercial document issued by a seller to a
buyer. Credit notes act as a source document for the sales return journal. In other
words, the credit note is evidence of the reduction in sales. A credit memo, a
contraction of the term "credit memorandum", is evidence of a reduction in the
amount a buyer owes a seller under an earlier invoice.

15. Checkbook:
A checkbook is a folder or small book containing preprinted paper instruments
issued to checking account holders and used to pay for goods or services. A
checkbook contains sequentially numbered checks that account holders can use
as a bill of exchange. The checks are usually preprinted with the account holder's
name, address, and other identifying information. In addition, each check will also
include the bank's routing number, the account number, and the check number.
16. Direct Debit:
A way of paying bills by allowing people or companies to take money directly from
a customer's bank account on a particular day

17. Bill of Exchange:
A bill of exchange is a written order used primarily in international trade that binds
one party to pay a fixed sum of money to another party on demand or at a
predetermined date.

18. Bill of Order:
An order that is received without payment; requires billing at a later date.

19. Interest Expense:
An interest expense is the cost incurred by an entity for borrowed funds. Interest
expense is a non-operating expense shown on the income statement.

20. Fee Expense:
A fee is a fixed price charged for a specific service. Fees are applied in a variety of
ways such as costs, charges, commissions, and penalties. Fees are most
commonly found in heavily transactional services and are paid in lieu of a wage or
salary. 

21. Drafts:
Is a negotiable instrument where payment is guaranteed by the issuing bank.
Banks verify and withdraw funds from the requester's account and deposit them
into an internal account to cover the amount of the draft. A seller may require a
bank draft when they have no relationship with the buyer. 

22. Funding Receipt:
Is the document that a company (also known as originator, beneficiary or issuer)
issues when a payer (also called receiver or debtor) makes a payment in its favour.
When this transaction is carried out through the bank, the receipt is issued by the
entity itself, which pays the amount into the account and then charges it to the
payer.

23. Stop Payment:
Is a formal request made to a financial institution to cancel a check or payment that
has not yet been processed. A stop payment order is issued by the account holder
and can only be enacted if the check or payment has not already been processed
by the recipient.
24. Miscellaneous Transaction:
Means any transaction between the county and any other party other than:
purchases of goods; transactions involving real property; and purchases of
services.

25. Manual Check:
Means payment requests requiring special processing, handling, and payments
sent by couriers.

26. Interest Paid:
Means all interest, acceptance commission and all other continuing, regular or
periodic costs, charges and expenses in the nature of interest (whether paid,
payable or capitalised) including, for the avoidance of doubt, finance charges
relating to finance leases and hire purchase obligations.