Chapter 5 (personal finance)
(true)
" a canceled check serves as proof of payment for bills or purchases"
(true)
" a checking account allows easy access (liquidity) to the cash in your account"
(false)
" a third party check can easily be cashed or deposited into any account"
(true)
" checks should be written in ink with all spaces filled in"
(false)
" debit cards can be usedfor ATM transactions but not to make purchases"
(true)
" if a check is not properly endorsed, it may be returned by the bank to the customer and not deposited"
(true)
" most checking accounts have some type of fee unless certain conditions are met"
(false)
" most people do not keep a checking account because it is to much trouble"
(true)
" savings accounts are insured by the FDIC the same as checking accounts"
(false)
" the payee is the person who is writing the check"
(true)
" when a check is converted to a digital image, the check is truncated (not returned to you)
(false)
" with online banking it is not necessary to reconcile your account or to verify your balance"
(false)
" you should reconcile your bank statements once a year"
smart card
a card that contains a computer chip that stores electronic money
debit card
a card used to withdraw or deduct money from your checkings account
cashier's check
a check issued against the bank's funds
bounced check
a check that is returned to the payee's bank due to nonsufficient funds
money order
a check used to pay bills for which money is guranteed
postdated check
a check written with a date that will occur in the future
savings account
a demand deposit account designed for the accumulation of money in a safe place for future use
checking account
a demand deposit in a bank on which checks are drawn
us savings bond
a discount bond issued by the federal government
annuity
a fixed amount set aside on a regular basis over time
rule of 72
a quick formula for computing how long it will take to double money invested at a given interest rate
endorsement
a signature on the back of a check
principal
a sum of money set aside on which interest is paid
certificate of deposit
a time deposit that pays a fixed rate of interest for a specified length of time
checkbook register
a tool used to track checking account transactions
money market account
a type of savings account that earns the market rate of interest on the money deposited
check
a written order to a bank to pay a stated amount to a person
internet banking
accessing and managing your account online
cashier's check
all of the following may be required to open a checking account except a security question
inactive account
an account that does not meet minimum usage requirements
joint account
an account with two or more people is called
stop payment
an instruction to the bank not to honor a check that has been issued or lost
$60.00
if you set aside 1,000 for a year at 6% simple interest, how much interest will you earn at the end of one year
simple interest
interest computed on principal once during a certain time period
compound interest
interest earned on both principal and previously earned interest
(simple interest)
interest paid only on the principal is called
deposit
money added to a checking or savings account
nonsufficient fund fees
overdraft protection helps you avoid
withdrawl
taking money from your account
7.2 years
using the rule of 72, if you can invest your money at 10% how long will it take to double your investment amount
withdrawing cash
which of the following banking activities cannnot be done on the internet
restrictive
which of the following endorsments would include the instructions "for deposit only"
cashier's check
which of the following is issued by a bank against its own funds
drivers license
which of the following would not be kept in a safe deposit box
floating check
writing a check and planning to make a deposit later to cover it before the check is processed
