Ted used a $150 check to pay for some books. Where in his checkbook register should he write this amount?
The correct answer and explanation is :
The correct place for Ted to write the $150 check amount in his checkbook register is under the “Payments and Withdrawals” section.
Explanation:
A checkbook register is a tool used to track all transactions involving a checking account. This includes deposits, withdrawals, checks written, fees, and any other activities that affect the balance of the account. The register helps maintain an up-to-date record of the account’s balance, ensuring that the individual can reconcile their checkbook with their bank statements and prevent overdrawing their account.
Each transaction is recorded in a specific format, typically including the following details:
- Date: The date the transaction occurred.
- Description/Payee: The name of the person or organization to whom the payment was made or the source of a deposit.
- Payment or Withdrawal Amount: The amount of money withdrawn, spent, or paid out, which reduces the account balance.
- Deposit Amount: The amount of money deposited into the account, increasing the balance.
- Balance: The running total of the account balance after the transaction.
Since Ted is using a $150 check to pay for books, this is a payment (not a deposit). Therefore, it falls under the Payments and Withdrawals section of the register, where any outgoing payments or expenses are recorded. This ensures that the amount is subtracted from the current balance, accurately reflecting the reduction in Ted’s account.
In the register, Ted would fill in the following:
- Date: The date the check is written.
- Description: A note such as “Books” or “Bookstore.”
- Payment or Withdrawal Amount: $150, the amount written on the check.
- Deposit Amount: This would be left blank since no deposit is made.
- Balance: The new balance after subtracting the $150 payment.
By recording this transaction in the correct section, Ted will ensure his checkbook balance remains accurate, avoiding overdrafts or confusion when reconciling his account later.