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