personal finance unit 4 test

Customer deposits in a federally insured bank are insured up to what amount?

$250,000

Which of the following topics should be considered when shopping for a checking account?

All of the above.

The ____________________________________________ is an independent agency created by the federal government to protect bank customers by insuring their deposits.

FDIC

Which following statement is true of Internet banks?

Their low overhead costs allow them to pay higher interest rates on savings accounts.

Which of the following items does not appear on a regular check?

balance of the account

A financial institution that receives, lends, exchanges, and safeguards money is a(n) _____________________________________________.

bank

Process of comparing the check register with the bank statement.

bank reconciliation

Record of checks, ATM transactions, deposits, and charges on an account.

bank statement

Personal check that the bank certifies is genuine and that there is enough money to cover the check.

certified check

License authorizing a bank to operate.

charter

A written order for the bank to pay a specific amount to a specific person is a(n) _____________________________________________.

check

It is important to keep track of all your checking account transactions in the _____________________________________________ so you know how much you have in your account.

check register

Bank account that allows the owner to make deposits, write checks, and withdraw money.

checking account

A(n) _____________________________________________ bank is a business in which the primary function is to receive, transfer, and lend money to individuals, businesses, and governments.

commercial

Which type of bank is commonly known as a full-service bank?

commercial bank

A type of commercial bank that is locally owned and operated is a(n) _____________________________________________ bank.

community

Plastic card that allows the holder to make credit purchases up to an authorized amount.

credit card

Nonprofit financial cooperative owned and operated for the benefit of its members.

credit union

Using a(n) _____________________________________________ has the same result as writing a check, because the amount of the purchase comes directly from the checking account.

debit card

Portion of the bank's earnings paid to depositors of a mutual savings bank.

dividends

A(n) ______ checking account is a combination savings and checking account.

interest-bearing

Money that can be accessed easily is said to be _____________________________________________.

liquid

Anything of value that is accepted in return for goods and services.

money

Financial institution that is owned by its depositors.

mutual savings bank

A(n) ____________________________________________ bank provides banking services exclusively online.

online

Check written for an amount greater than the balance of the account.

overdraft

What banking service ensures a financial institution will honor a check even if it exceeds the account balance?

overdraft protection

The person, business, or organization to whom the check is written is the _____________________________________________.

payee

A(n) _____ check is written with a future date.

postdated

To ____________________________________________ is to compare items to make sure they are in agreement with each other.

reconcile

You received your paycheck at the end of the day today, and you plan to go to the bank tomorrow. If you want to endorse the check immediately, which endorsement should you use?

restrictive endorsement

A box within a bank vault that can be rented by a customer to store valuables is a(n) _____________________________________________.

safety deposit box

A(n) _____________________________________________ is used by depositors to accumulate money for future use.

savings account

Financial institution that offers most of the services commercial banks do.

savings and loan association (S & L)

A(n) _____________________________________________ requests that a financial institution refuses to honor a check written.

stop payment order

A _____ is a special payment that functions as cash.

traveler's check

Movement of money electronically from one financial institution to another.

electronic funds transfer (EFT)

Signature on the back of a check.

endorsement

______________________________ is the process of transferring money from one individual or organization to another.

financial exchange

Organization that provides services related to money.

financial institution