... Glossary of Terms

ABA # or Bank Routing # - The nine digit number that designates the bank and location to which the transfer must be delivered.  This applies to transfers only within the U.S.

Account Analysis – A banking service for business customers that provides a finely detailed statement of all activity related to the account.

Agency Funds – Resources held by the institution as custodian or agent for students, faculty or staff, and organizations.  No institutional equity in these funds.

Annuity Funds – Funds established through a deferred giving contract.  Payments to beneficiaries include both interest and a portion of principal. Upon the beneficiaries’ death, the funds revert to the agency.

Balance Sheet – Statement showing the financial position at the end of an accounting period.  On the balance sheet, total assets are equal to total liabilities and net assets.

Book Value Method – Distribution of income among funds in an investment pool by book value of the funds.

Beneficiary – The individual or entity receiving the funds transfer. 

Cash – Term used in this document to include currency, coins, checks, money orders, negotiable instruments and credit card transactions.

Custodian – The employee that is solely responsible for a petty cash or change fund.

Debt Service – Payment of interest and matured principal on outstanding bonds or notes payable.

Depository Bank – The designated bank to which the University deposits all funds (currently JPMorgan Chase Bank).

Depository Agreement - An official agreement used to establish bank accounts for the safekeeping of University funds.

Domestic Transfer – A funds transfer with the receiving bank located in the U.S. and the correspondent bank is located in the U.S.

Drawee Bank – The bank on which the electric transfer is drawn, the payor’s bank. 

Electronic Funds Transfer (EFT) – The movement of funds by non-paper means (i.e. electronically).

Encryption – The process of encoding electronic transaction information, to allow secure transmission of data over the Internet. 

Fund Accounting – Method of segregating assets into categories according to restrictions placed on their use by the funding source.

Fund Balance – Value of the excess of assets over liabilities in any fund group or subgroup.

Initiating Bank – The bank responsible for sending the transfer. 

Initiator – The individual responsible for communicating funds transfer to the financial institution.

International Transfer – A funds transfer with the receiving bank located outside the U.S.

Investment Book Value – Recorded Value of an investment asset.  Book value is cost at date of acquisition, or market or appraised value at date of receipt as gift.

Investment Pool – A number of endowment or other funds commingled for asset management and accounting purposes.

Lockbox – A banking service in which payments or deposits are collected by the bank at a postal or drop box, and then processed by a special department in the bank.

Ordinary Income – Earnings of an investment exclusive of realized and unrealized gains; includes dividends, interest, rents and royalties.

Overage & Shortage – The title for an institutional account used to account for the differences between book balances of funds and actual funds on hand.

Payee – The party to which a transfers is made payable.

Payor – The party that issues the transfer.

Post Dated – A date on a document or check which follows the date of actual initiation or execution.

Presentment – The delivery of an electronic funds transfer or negotiable instrument to the payor’s bank.

Reconcile – To balance to a separately maintained set of data.

Reconciliation – A calculation that shows how one balance or figure is derived systematically from another.

Restitution – Restoration of monies to its rightful owner (e.g. replacing an NSF check).

Restrictively Endorsed – Refers to affixing the signature, name and account number to whom the transaction is to be credited.

Settlement Date – Date of electronic funds transfer that determines the availability of funds. 

Stale-dated – A check that is dated in the past, usually six months or more; or a check with instructions written on the face of the check, such as “Void after 90 days”.

S.W.I.F.T. (Society for Worldwide Interbank Financial Telecommunications) – This is the major international financial telecommunications network that transmits international payment instructions as well as other international financial messages.

Validating – The process of imprinting information on a document, usually from a cash register printer.

Validation – The imprint placed on a document, usually from a cash register printer.

Void – A transaction that has been deleted or replaced by another.

Wire Transfer – A same day electronic transfer of funds from one financial institution to another, conducted through the Federal Reserve’s Fedline system.

 

The University of Texas Health Science Center at Houston
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Last updated February 7, 2007