Business & Finance Chapter 17

What is another name for the purpose of the check?

Memo

Bank statements are given _____

Monthly

What type of deposit institution's profits are distributed in proportion to the amount of business each participant does? -savings and loan associations -mutual savings banks -commercial banks -credit union

Mutual savings banks

Is there a fee when writing checks from your checking account?

No

If you make a mistake when writing a check, it is recommended that you _____ -erase it and correct it -write "Stop Payment" across the check -rip it up immediately -none of the above

None of the above

(T/F) A deposit in a credit union is considered partial ownership in the credit union

True

(T/F) A lost check made out to "cash" can be cashed by anyone

True

(T/F) An endorsement is written evidence that you received payment

True

(T/F) Banks offer safe deposit boxes for the storage of valuables

True

(T/F) Electronic funds transfer uses technology for banking activities

True

(T/F) The Federal Reserve System (FED) supervises and regulates member banks.

True

(T/F) financial analysts expect change in the future in the way Americans use banks and money

True

(T/F) using a debit card is similar to writing a check

True

(T/F) you must sign Traveler's checks at the time you purchase them

True

When customer's turn investments over to a bank to manage for them, they have set up a __ -trust -reserve -safe deposit -share draft

Trust

An activity account may be the best alternative for someone who ______ -can afford to keep only a small minimum balance -can afford to keep a large minimum balance -writes many checks each month -writes very few checks each month

Writes very few checks each month

What is consisted of a blank endorsement?

Your Signature

document created to show how the two balances (check register and bank statement) were brought into agreement

bank reconciliation

A separate book, usually the same size as a checkbook, which allows you to maintain a record of the checks written

check register

Written evidence that you received payment or that you transferred your right of receiving payment to someone else

endorsement

When two or more people have a bank account together, it is called a __________

joint account

Checks that have not been deducted from the bank statement balance

outstanding checks

Mutual savings banks are organized mainly for ___

savings and home loans

A fee a bank charges for handling a checking account

service charge

Special forms for making payments when you are away from home are (?)

traveler's check

An individual has $300,000 on deposit at a bank insured by the Federal Deposit Insurance Corporation (FDIC). The bank fails. How much money can the depositor expect to get back from the FDIC? -$300,000 -$200,000 -$250,000 -$100,000

$250,000

How much money does the FDIC insure up to??

$250,000

Kim's bank statement shows a balance of $436.15 in her checking accounts. Her check register lists checks for $25.11 and $11.33 that have not cleared. There are no other outstanding deposits or payments. What balance does her check register show -$472.59 -$399.17 -$36.44 -$436.15

$399.71

In order to determine if a check has been payed, what do we use?

-Canceled check -Substitute check

What are other types of payments?

-Certified checks -cashier's checks -traveler's checks -money orders

How do we find the difference of the reconciliation process?

-bank reconciliation -outstanding checks

What is consisted of the restrictive endorsement?

-for deposit only -account # -your signature

What is consisted of the special endorsement

-pay to the order of -the person's name -your signature

What are the three main types of checking accounts?

-regular checking accounts -interest-earning checking accounts -special checking accounts

What are some types of selecting a financial institution>

-safety -convenience -fees and charges

What are some types of financial services?

-savings services -payment services -lending services -storage of valuables

Canceled check has ____

Already been payed

The document created to show how the two balances were brought into agreement

Bank reconciliation

a report sent by the bank on regular intervals, usually monthly, on the status of your account

Bank statement

If you endorse a check with only your name, you have created a _______ endorsement

Blank

A personal check with guaranteed payment is a ___ -cashier's check -money order -certified check -traveler's check

Certified check

A(n) ____ is a separate book used for recording checking account acitvity

Check register

Most banks are set up as ________ banks

Commercial

What type of deposit institution frequently has branch offices in shopping centers and grocery stores? -savings and loan associations -mutual savings banks -commercial banks -credit union

Commercial banks

What type of institution is often described as full-service banks because they offer a wide range of services? -commercial banks -credit unions -mutual savings banks -savings and loan associations

Commercial banks

All of the following financial institutions accept deposits from individual savers except ___ -mutual savings banks -credit unions -commercial banks -consumer finance companies

Consumer finance companies

What type of deposit Institution accepts savings deposits and makes loans to members only? -mutual savings banks -credit union -commercial banks -savings and loan associates

Credit union

A bank-issued card used for ATM transactions

Debit card

When putting money/checks into your account

Deposit slips

What is another name for the person's bank that the money is taken out of?

Drawee

What is another name for the person writing the check

Drawer

A ____ writes the check to the _____ who is paid from the funds deposited with the _____

Drawer, payee, drawee

(T/F) all banks are apart of the fed

FALSE

(T/F) A cease-and-desist order is written notice to the bank not to pay a check

False

(T/F) A central Federal Reserve Bank is located in the capital of each state

False

(T/F) A credit card is used for ATM transactions

False

(T/F) A fee a bank charges for handling a checking account is a penalty

False

(T/F) If you write only a few checks each month, you should consider a regular checking account

False

(T/F) When you use a debit card to make a purchase, you are borrowing from the bank

False

(T/F) a certified check that a bank draws on its own funds

False

(T/F) automatic payments are made through automatic teller machines

False

(T/F)) Safe deposit boxes can be open by banks

False

Outstanding checks are checks that _____ -have not cleared the bank as paid -the bank has guaranteed will be paid -require an endorsement -travelers use outside the US

Have not cleared the bank as paid

How many federal reserve districts are there?

12

What district are we in?

3

What percent of banks are apart of the FDIC?

99%

A disadvantage of a check-cashing outlet (CCO) is that _____ -a CCO charges a lot for its services -a CCO provides no other services besides check cashing -you must leave a valuable item, such as jewelry, with the CCO in exchange for cash -you must have a bank account to cash a check at a CCO

A CCO charges a lot for its services

Some of the checks you wrote may not have cleared. These checks, which have not been deducted from the bank statement balance

Outstanding checks

Writing a check for more than you have in your account can result is a(n) -post dated check -canceled check -stop payment order -overdrawn account

Overdrawn account

(T/F) the financial institution most likely to charge the highest rate for a loan would be -bank -pawnshop -credit union -mortgage company

Pawnshop

(?) Make loans based on the value of some tangible object, such as jewelry

Pawnshops

What is another name for the person receiving the money into their account?

Payee

Which of the following is not a function of the FED -holds deposits from banks -provides check clearing services -provides investment accounts for individuals -supervisors and regulates banks

Provides investment accounts for individuals

A container for storage of valuable offered by banks

Safe deposit box

If a deposit insurance is most important to you when selecting a financial institution, you are most concerned with -safety -convenience -services -fees

Safety

What type of deposit institution traditionally specializes in savings accounts and loans for home mortgages? -commercial banks -savings and loan associations -mutual savings banks -credit unions

Savings and loan associations

What do you have to always do in order for the check to be cashed?

Sign it at the bottom right

The first document that must be completed when opening a checking account is the -deposit slip -reconciliation statement -check register -signature card

Signature card

______ are cards with embedded microchips that store data, such as prepaid amounts, account balances, transaction records, insurance information, and medical history.. -Smart cards -ATM card -Debit Card -stored-value cards

Smart cards

Prepaid cards for items such as phone service are called (?)

Stored- value cards

A digital reproduction of an original paper check is known as a _____ check -canceled -certified -cashier's -substitute

Substitute

A digital reproduction of the original paper check

Substitute check