Chapter 5 (personal finance)

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(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


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