eQuizShow

Chapter Five Review

Financial Institutions

Question: What is the most common type of bank worldwide?
Answer: Commercial banks.

Question: What are two reasons to use a bank?
Answer: Place to keep money safe, convenient for checking accounts, a place to apply for loans, and a place to earn interest safely. 

Question: What financial institutions give short term loans and expect a lot in interest back. They usually lead to a never ending cycle of debt?
Answer: Payday lenders and check cashing companies.

Question: What financial institution is non- profit and shares profit with its members?
Answer: Credit Unions

Question: Name all the financial institutions out to make a profit.
Answer: Commercial banks, pay- day lenders, check cashing companies, and savings and loans associations.

Using an account

Question: True and False: A consumer always has to pay a to the bank to open and maintain a checking account. 
Answer: False.

Question: When would you void a check?
Answer: If a check gets lost, or you make a mistake writing it you could void the check cancelling it. 



Question: How do you reconcile an account?
Answer: By matching the bank statement to your checkbook register.

Question: What is an outstanding check and an outstanding deposit.
Answer: They are a check, or deposit that was not included in the bank statement. 

Question: List three things you could do if your account did not balance.
Answer: Call the bank, check your math, make sure fees are deducted, and be sure you counted all outstanding checks and deposits.

Financial Transactions

Question: What is a credit?
Answer: A credit is any money added to your bank account. 

Question: If you needed to move money to an account what could you do?
Answer: You could make a transfer from another account, or a deposit. 

Question: How is a loan similar and different to a transfer.
Answer: A loan is similar in the fact that it is transfer of money, but it is only temporary because you have to pay the money back with interest.

Question: How many hours can an Automated Clearing House be up to clear a transaction?
Answer: It can be up to 72 hours.

Question: What percent of transactions are "plastic" (debit or credit card)?
Answer: Over 50%.

Check vs. Debit

Question: What does ATM stand for?
Answer: Automatic Teller Machine.

Question: What does floating a check mean?
Answer: To write a check knowing you don't have all the money, but you'll get payed soon enough to pay it off.

Question: What is the rule of thumb for any transaction done with a checking account?
Answer: Writing it i n the check book register.

Question: What is one advantage of debit cards over credit cards?
Answer: Debit cards are immediate.

Question: Name at least four fees with a checking account.
Answer: Monthly, ATM, Stop- payment, online billing, overdraft, and NSF fees.

Vocabulary

Question: Define withdrawal.
Answer: A withdrawal is the opposite of a deposit, anytime you take cash out of your bank account, you are making a withdrawal  

Question: What is interest?
Answer: Interest is the cost of using money, which can be paid by banks to their depositors or paid by borrowers for loans 

Question: Define commercial bank.
Answer: A commercial bank is the most common type of financial institution , it is privately owned and offers a wide range of services and is run to make a profit.

Question: Define a debit card.
Answer: a plastic card used to withdrawal cash from a checking account, or make payments electronically 

Question: Define signature authorization form. 
Answer: This is a document that leaves the account holders signature and files with the bank to prevent fraud.