75. The Certification Book

The certification book should be kept in the paying teller's department.

A certified check is a check of a depositor, drawn to the order of some person, upon the face of which the bank has certified its genuineness and value, after having charged it to the account of the depositor. The bank certifies to the correctness of the signature and to the fact that the account is in funds to meet the check when presented for payment in the regular course. Some New York City banks certify payable only through the Clearing House, that is, they will pay it only when presented by some other bank through the Clearing House.

76. Standing In Liabilities

Since a certified check is charged to the customer's account when certified, the obligation to pay is then the bank's. Its liability is no greater, it is only in a slightly changed form. Before certification it owed the money to the depositor. After certification it owes the money to the payee named on the check, or to his order.

77. Records

A good record is shown in Figure 54 on page 115, a record frequently found in small banks. It is sometimes kept in an ordinary day book. On the credit side are listed the checks as they are certified.

Certified Check Register

Figure 54. Certified Check Register.

The total of certified checks paid each day is listed on the debit side and checked off on the credit side. This book may then serve as a posting medium to the general ledger for both credit and debit, and to the individual ledger for debits to individuals. The total of the certified checks for the day is credited to certified checks and charged to the various accounts on individual ledgers. When the checks are paid in the regular course, the account "certified checks" is charged and credited. As soon as the checks are paid, they should be checked off the certified register, using a dating stamp for this purpose, to note the date on which the item was paid.

78. Method Of Proving

To prove the certified check register, take a list of the items remaining unchecked, including the last day's certified, none of which will yet be paid. This should agree with the total of the account "certified checks" on the general ledger.

79. Claims For Lost Certified Checks - Bond Of Indem-Nity

Once in a great while a certified check is lost. It has been charged to the account of the customer. His creditor is clamoring for the money. The bank can not stop payment on the lost check unless an endorsement is forged, because it has promised to pay the check when presented in the regular course. Before crediting the customer's account with the amount of a lost certified check, the bank should require him to give a bond of unquestionable security of twice the amount of the check, indemnifying the bank against all claims for refusing to honor it in case it should be presented.

80. Debit And Credit Books

There seems to have been very little improvement in debit and credit books or check and deposit scratchers, as they are often called. The common ruling is shown in Figure 49 on page 100.

When the checks and deposit tickets have been sorted in the order their accounts appear on the ledger, they are listed in their respective books. The clerk who makes up these books must write out the names of every account having a transaction during the day. This makes a great deal of work, but it furnishes an excellent book of original entry with which many banks have been loth to part. They are sometimes used as posting media and sometimes simply as records to which the postings made on the ledger from the original documents may be checked. If the bank has a large number of accounts in which action occurs every day, several days may be entered with one writing of the names by adding several more columns to the form shown in Figure 49 on page 100. The labor may be further reduced by having the printer fill in the names of the very active customers and leaving sufficient space for others.