Periodic Statements, Research Paper Example

Provide an example of an organization that did not use periodic statements in their accounting practices:

Periodic statements are provided to account holders on a regular basis, normally monthly or quarterly, in order to keep the account holder informed about transactions that occur within the account and other information such as interest accrual and so forth. One such type of account that does not issue period statements is a passbook savings account. This particular type of account is structured so the account holder has preauthorized funds transfers that are electronic in nature and occur at regular intervals. One organization that routinely uses this type of account is the Social Security Administration.

The Social Security Administration obtains preauthorization to electronically credit funds into an individual’s passbook account each month on a certain date, normally around the first of the month, and for a certain specific amount. Each month thereafter, the funds are then remitted until the individual becomes deceased or the account is closed for some reason. This passbook account is not required to have a monthly or quarterly reporting of periodic statements due to the preauthorization made when the individual registers with the federal government to receive Social Security Benefits upon reaching the required age as mandatory by law.

It is important to know the difference between electronic funds transferred by the Social Security Administration and other entities. The Social Security Administration funds are acceptable into a passbook account. Other organizations that have electronic funds credited to an account are not automatically passbook accounts and must still comply with the periodic statement rules as required by federal banking policies. They must send statements periodically, at least once per quarter or more frequently, to keep customers abreast of changes in their account.

References

Consumer laws and regulations: Truth in Savings Act. (2012). Retrieved from Consumer Financial Protection Bureau: http://www.consumerfinance.gov/guidance/supervision/manual/tisa-narrative/

Social Security. (2012). Retrieved from United States Social Security Administration: http://www.socialsecurity.gov/