Part 1

Choose from the list of words provided and insert the correct word or words in each blank. Use all words provided, and please note that some words appear more than once.

The first stage in the check payment process begins when the (1) ______________ writes a check on his or her account payable to an identifiable person, bearer, or cash. After the (2) _______________ writes a check, the next step is for the (3) ______________ to accept the check. The (4) ______________ can transfer the check to another person, convert it to cash, or deposit it to an account. The top one-fourth of the back of the check is reversed for (5) ______________, and the three principal types are (6) ____________, (7) ___________, and (8) ____________. The (9) _____________ accepts the check, which has been endorsed by the payee. From there it is bundled as (10) ______________, or if check images as (11) _________________, for presentment to the (12) _____________. The (13) _____________ receives checks directly from other banks or through a (14) _____________, (15) ______________ or (16) ________________. As the end of the day, transactions are (17) ________________ to the accounts. When (18) ______________ view their statements online or receive their statements in the mail listing the previous months checking account deposits and debits, the check payment process has come full circle.

Word List

drawer endorsements image cash letter

payee clearing house drawee

depositary bank in-clearing posted

customers sorted correspondent bank

cash letter restrictive Federal Reserve Bank of Cleveland

payee drawee blank

special drawer

Part 2

For each situation, explain what the teller needs to look for before cashing the check

1) The check is made out to Bill and Susan Smith.

2) The check is made out to Bill or Susan Smith.

3) The check is made out to Bill Smith and State Farm Insurance.

4) The check is for the amount of $500 but the written words are "one hundred & fifty". What would the teller cash the check for?

5) The customer is not a bank customer but the check they are trying was written by a customer of your bank. Can the teller cash it? If so, what should they look for?