How did banks keep track of accounts before computers?
Now days we have databases and software to manage customer accounts. However, back before computers that wasn't a luxery. Say I had $300 back in 1922, and I needed $20.00 of it. How did the teller know that I had the money? Did they have to look at a general ledger and manually deduct the amount from the ledger? Or was there a more sophisticated way to manage customer's money?
How did banks work in the past before the arrival of the computer age?
The banks worked mostly as they work today, but more slowly and using mostly paper. That is, someone would make a deposit, the clerk would count the money, register it in a book and give the depositant a receipt of the deposit.The bank would keep the money and regularly send the money and a copy of the registry to the central bank.This was, of course, more time consuming and bureaucracy consuming than today, and required each branch to be more independent, being controlled by regular audits.About your specific questions:1) Since bank branches can't quickly communicate with each other, how do they know how much money a person owns?The local branch knows, and that is enough. If a person wants to travel, he or she would withdraw money to take or have a letter of credit to take. There were no ATM machines so there was no need to have a constantly update central account.2) If there are recorded booklets to carry, would those be easily fraud?No likely. Each customer would have signed receipts as evidence. Also, the registry would be made in front of the customer. And these being handwritten papers, forgeries would have to be very well done or they would be easily detectable.3) Since the tellers of the banks directly handles moneys given to them, would it be prone to corruption from stealing money?They would have to write a receipt for the customer, and a fill in the bank registry. If the numbers did not match the amount, they would be in deep trouble.If you are specifically asking about the 16th century, remember:1) There was much less population. Venice was the largest italian city of the time and had no more then 100.000 citizens.2) Not a lot of people had enough money to be able to deposit it in banks. Only wealthy merchants and aristocrats and they were on first-name terms with the bankers.3) The punishment for stealing was at least having your hands cut off. To risk that you had to be very foolish, desperate or sure that you wouldn't get caught.
What is the journal entry of a purchased machine by cheque?
This transaction uses cash which is an asset and purchases a piece of Machinery, which is also an asset. Assets are increased by debiting the account, and decreased by crediting the account. So in this situation you would credit the checking account for the purchase price of the machine and debit an asset account set up for the machine (printing press, band saw, or whatever appropriate name). The credit in your checking account would correctly reduce the amount you have available and the debit in the machine account would increase the company assets by the cost of the machine. This transaction would essentially be a wash because the amount taken out of the checkbook would equal the amount of the new piece of Machinery so it would just be moving the asset from one area to another (cash to a machine). However you would also need to create two accounts in order to keep track of the depreciation of the piece of Machinery. The first account is called an accumulated depreciation account, which is a contra account to the machine asset account. Then as depreciation is recorded as an expense, this account will be used to keep track of it. Entries into this contra account will decrease the value of the machine but you will always be able to see its original cost in its main account . The second account you need to create is a depreciation account for the machine to record the actual expense of the depreciation. The balances in the machine and accumulated depreciation accounts are carried forward from year to year but the balance in this expense account is cleared out at the end of the tax year. It is used to keep track of the yearly expense of depreciation for the machine. Smaller companies may use just one expense account to record all of their depreciation cumulatively. Larger companies may wish to separate out the depreciation by asset
Where do banks keep all the money?
Banks keep some amount of cash in the branch. The amount they keep varies from branch to branch based on their requirements. This cash is meant to serve cash withdrawals and ATM refills. Most branches are linked with 3-4 ATMs in the vicinity. Branches send cash to be filled into the ATM when the machine is running out of cash. So some amount of cash is also stored in the ATM machine itself.Apart from that, the major amount of cash is stored in chest branches of banks. Chest branches are branches specially designated for this purpose by RBI. These have secure cash storage facility and maintain high security. Chest branches can have anything between Rs. 75 crores to Rs. 1000 crores. These chest branches facilitate collection and distribution of cash from/to nearby areas.You won't know a branch is a chest branch even with the high security because most of the security will be around the chest itself, not on the main gates of the branch.Of course all this information is relevant to India itself. Since the OP is anonymous, I answered from India's perspective. Would be happy to know how cash is dealt with in other countries.
Help!!! Temorarily unavailable at atm, what does this mean?
ok, I went to an atm machine and it said "temporary unavailable" during a transaction. Is my account hacked or stolen because I checked my account and money is in it. Help