Question 1

cashier's check

Accepted Answer

- a check drawn by a bank on itself

Question 2

certified check

Accepted Answer

- a check that has been accepted by the bank on which it is drawn - essentially, the bank, by certifying (accepting) the check, promises to pay the check at the time the check is presented

Question 3

clearinghouse

Accepted Answer

- a system or place where banks exchange checks and drafts drawn on each other and settle daily balances

Question 4

collecting bank

Accepted Answer

- any bank handling an item for collection, except the payor bank

Question 5

depositary bank

Accepted Answer

- the first bank to receive a check for payment

Question 6

digital cash

Accepted Answer

- funds contained in computer software, in the form of secure programs stored on microchips and other computer devices

Question 7

e-money

Accepted Answer

- prepaid funds recorded in a computer or a card (such as a smart card)

Question 8

electronic fund transfer (EFT)

Accepted Answer

- a transfer of funds with the use of an electronic terminal, a telephone, a computer, or magnetic tape

Question 9

Federal Reserve System

Accepted Answer

- a network of twelve central banks, located around the country and headed by the Federal Reserve Board of Governors - most banks in the United States have Federal Reserve accounts

Question 10

intermediary bank

Accepted Answer

- any bank to which an item is transferred in the course of collection, except the depositary or payor bank

Question 11

overdraft

Accepted Answer

- a check written on a check in account in which there are insufficient funds to cover the amount of the check

Question 12

payor bank

Accepted Answer

- the bank on which a check is drawn (the drawee bank)

Question 13

Regulation E

Accepted Answer

- a set or rules issued by the Federal Reserve System's Board of Governors under the authority of the Electronic Fund Transfer Act to protect users of electronic fund transfer systems

Question 14

smart card

Accepted Answer

- prepaid funds recorded on a microprocessor chip embedded on a card; one type of e-money

Question 15

stale check

Accepted Answer

- a check, other than a certified check, that is presented for payment more than 6 months after its date

Question 16

stop-payment order

Accepted Answer

- and order by a bank customer to his or her bank not to pay or certify a certain check

Brainscape's Knowledge GenomeTM

Chapter 15 - Banking in the Digital Age Flashcards

Brainscape's Knowledge Genome^TM