CH14 AMA EXAM
A check is negotiable and must be signed by the bank.
B) False
A stop payment may be instituted if a check guarantee card was used.
B) False
Federal law prohibits a retailer from converting a paper check into an electronic check.
B) False
Financial transactions are those that involve only cash.
B) False
If the numeric and written-out amounts are different, the bank will credit only the numeric amount.
B) False
When deposits are made, they are added to the balance of a bank account, or
B) credited.
The person who signs a check or order to the bank to pay funds from an account is the
B) drawer.
On the back of a check or money order, the payee must write his name as it appears on the front. This is referred to as a/an
B) endorsement.
On a monthly basis, to ensure accuracy of the bank balance, the bank statement should be
B) reconciled.
ABA number
Bank or transit number; coding system developed by the American Bankers Association and used on checks to identify the location of the bank
What is the most common way of endorsing a check when the payee simply signs his name on the back?
D) Blank endorsement
What is the name for a check which has been created from a digital image of the original?
D) Electronic check
When an account holder has given the bank permission to transfer funds monthly for bill paying as a substitute for check writing, it is referred to as
D) automatic bill paying.
When choosing a PIN for use with a bank account, be sure to A) use numbers that are found in your wallet. B) tell someone else in case you forget. C) include part of your social security number. D) none of the above.
D) none of the above.
You should call the patient and ask him to send a new check when you receive a/an
D) unsigned check.
payee
The person named on a check as the recipient of the amount shown; also known as bearer
payer
The person signing a check to pay out funds from a checking account
voucher
a check stub
What is the name for a special endorsement when a check (third-party check) is to be transferred to another person or company?
A) Full endorsement
What is the name of the document that is purchased for face value plus a fee and is issued according to the purchaser's instructions and signed by the purchaser?
A) Money order
A paycheck presented in payment of the patient's medical bill is an example of a third-party check.
A) True
If a deposit did not include as much money as shown on the deposit slip, or an uncashable check is received, a stop payment order may be sent by the bank.
A) True
If the endorser name is incorrect on the face of the check, it should be endorsed twice.
A) True
Point-of-sale banking is a system that brings banking to the business location, allowing instant transfer of funds.
A) True
Some banks will process an unsigned check if funds are available in the customers account.
A) True
Withdrawal of funds from one account and transferring them to another, in specific amounts, at specified times, according to prior written agreement, is known as
A) automatic transfer of funds
When checks are written or other withdrawals are made, they are subtracted from the bank balance, or
A) debited.
A check must be written as payable to the
A) payee.
A check that is not considered negotiable but can be converted into a negotiable instrument or cash is a/an
A) warrant.
A paperless computerized system enabling funds to be debited, credited, or transferred is known as
C) electronic funds transfer system.
When a check is written and is not backed by funds in the bank, usually on new accounts, it is referred to as
C) kiting.
A check that is so old when presented for payment that it is no longer valid is called a/an
C) stale check.
Removal of funds from a checking account by writing a check or from a savings account by completing a slip and presenting a passbook is known as
C) withdrawal.
Precautions to be aware of when using an ATM.
Complete the deposit envelope ahead of time. Park in a well-lit area if using a walk-up ATM. Pull close to the ATM when using a drive-up machine. Select a PIN that does not contain any numbers that appear in your wallet. Never disclose your PIN to anyone. Protect the PIN by preventing others from watching you input the code. Avoid ATMs with suspicious new equipment. Retain the transaction receipt. At night, use an ATM indoors if at all possible. Never count or display money at the ATM. Never accept offers of help from anyone not associated with the bank. Put away your card, cash, and receipt and leave the machine immediately. Know the withdrawal limit. Keep track of your account balance and report discrepancies immediately. Call 911 if emergency assistance is needed.