Banking Exam Study Guide

Question 1

Interest

Answer 1

A fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets

Question 2

Deposit

Answer 2

To put money into bank

Question 3

Depositor

Answer 3

One who puts money into an account

Question 4

Federal Deposit Insurance Corporation (FDIC)

Answer 4

A Federal government agency that insures deposits in banks

Question 5

Inflation

Answer 5

A sustained increase in the average level of prices

Question 6

Currency

Answer 6

The paper money and coins used for financial transaction

Question 7

Check

Answer 7

An order to a bank to pay a specified sum to the person or business named on check

Question 8

Payee

Answer 8

The person or business named on a check and to whom a bank to pays a specified sum

Question 9

Remitter

Answer 9

The person who writes out a check

Question 10

Money Order

Answer 10

A printed order for payment of a specified sum, issued by a bank or post office

Question 11

Check Register

Answer 11

A personal record of ones checking account

Question 12

Bank Statement

Answer 12

A written record from your bank of all the transactions involving your account

Question 13

Endorsement

Answer 13

A signature on back of check

Question 14

Canceled Check

Answer 14

An image of a check that has been paid by a bank and kept by the bank

Question 15

Electronic Funds Transfer (EFT)

Answer 15

The electronic movement of money that allows electronic banking or e-banking to be accomplished

Question 16

Automated Teller Machine (ATM)

Answer 16

An electronic computer terminal which offers automated computerized banking

Question 17

Safety Deposit Box

Answer 17

A box with an individual lock that you can rent from a bank, thats located in a vault, where their contents are safe from fire, theft and loss

Question 18

How do Banks make Income?

Answer 18

Interests and Fees
Loans
Difference in interest from Borrowers and Depositors

Question 19

Why do people put money in Banks

Answer 19

To protect it
Earn Interests
Protects Purchasing Power

Question 20

How are Banks Regulated

Answer 20

Bank puts aside money so depositors can put in and take out money whenever

Question 21

What is the FDIC and how does it work?

Answer 21

Federal Deposit Insurance Corp and it protects peoples deposits

Question 22

What are the benefits of using a checking account?

Answer 22

Convenience, quick easy access, direct deposit, Eliminate need to carry cash, cost, can write checks, get bank statement

Question 23

How do you properly fill out a check

Answer 23

Date, Payee, Amount in numbers, amount in words,Signature memo

Question 24

What are the 3 types of check endorsements and characteristics of each

Answer 24

Blank: Least Secure, no instruction, can be deposited or Cashed
Restrictive: Most secure, for deposits only
Special: Used when payee wants to give check to someone

Question 25

What are the different methods to depositing Checks

Answer 25

ATM, Bank, Teller, Cell Phones, Debit Cards, Direct Deposit

Question 26

How does one fill out a deposit Slip

Answer 26

List Deposit or Withdraw Find Total Match Totals

Question 27

How does Electronic Banking Allow A Person To Make Withdraw Deposit and Bill Payments

Answer 27

Online

Question 28

How does A direct Payment Work?

Answer 28

Authorized bill to be paid by a specific bank Account

Question 29

How does online Banking Work?

Answer 29

Banks make websites at which consumers may complete transactions online

Question 30

Wire Transfer

Answer 30

An electronic communication that moves money in an account in one bank to an account in another bank

Question 31

Travelers Checks

Answer 31

Checks that you pay in advance, and if they are lost or stolen the company that you bought them from replaces them for free

Question 32

Money Order

Answer 32

A check that draws on the money of the bank or other financial institution that issued it

Question 33

Cashiers Check

Answer 33

A banks own check signed by the banks cashier, and whose payment comes from the banks own money

Question 34

Certified Check

Answer 34

A personal check that has been stamped and signed by a bank officer that guaranteed that your account has the money to cover the check

Question 35

Direct Payment

Answer 35

When a business is authorized to receive a payment by a specific bank account

Question 36

Direct Deposit

Answer 36

When a paycheck or benefit check is directly deposited into a specified bank account

Question 37

Personal Identification Number (PIN)

Answer 37

A number that is entered in at an ATM and that confirms that the individual is authorized to access that particular account

Question 38

Debit Cards

Answer 38

Plastic Cards, Which look like credit cards, but are electronically connected to a cardholders depository institution account