Business and Personal Finance © 2007

Chapter 5: Banking

Practice Tests

1
Many companies offer _____, which is an automatic deposit of net pay to an employee's designated bank account.
A)accounts receivable
B)amortization
C)gross profit on sales
D)direct deposit
2
A debit card allows you to _____.
A)pay for purchases directly from your checking or savings account
B)protect your checks from thieves
C)borrow money for a short term
D)spend more money than you have in your account
3
A _____ is a financial institution that traditionally specialized in savings accounts and mortgage loans but now offers many of the same services offered by commercial banks.
A)mutual savings bank
B)savings and loan association
C)credit union
D)life insurance company
4
What is money placed in a checking account called?
A)investment deposit
B)checking deposit
C)special deposit
D)demand deposit
5
The calculation for the rate of return is _____.
A)original deposit × total interest earned
B)total deposit ? original interest
C)total interest earned ÷ original deposit
D)total interest + original deposit
6
According to the Truth in Savings law, financial institutions have to inform you of all of the following EXCEPT _____.
A)number of deposits held in the bank
B)interest rate
C)annual percentage yield
D)terms and conditions of the savings plan
7
Overdraft protection is _____.
A)the use of a debit card to purchase an item or service at a retail store
B)an automatic loan made to an account if the balance will not cover checks written
C)the amount of interest that a financial institution would pay on a $100 deposit
D)the percentage of increase in the value of savings from earned interest
8
A _____ is a request that a bank or other financial institution not cash a particular check.
A)point-of-sale transaction
B)certificate of deposit
C)stop-payment order
D)rate of return
9
Your bank statement will include all of the following EXCEPT _____.
A)deposits
B)checks you have written
C)debit card charges
D)the number of years you have had the account
10
A(n) _____ is a report that accounts for the differences between a bank statement and a checkbook balance.
A)certificate of deposit
B)endorsement
C)bank reconciliation
D)money market account
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