Definitions

Question 1

Checking account

Answer 1

A checking account is a bank account primarily used for deposits and withdrawals. It’s considered a demand account because money can be withdrawn on-demand, without prior notice.

Question 2

Limitation of checking account

Answer 2

Checking accounts differ from other types of accounts in that withdrawals are not limited as long as the funds are available.

Question 3

Difference between personal and Business account

Answer 3

Some key differences between personal and business accounts are the fees, limits, and balance requirements. Business accounts also offer additional advantages such as employee debit cards. Having a separate business account will simplify taxes, protect personal liability, and give a business more credibility.

Question 4

Petty cash

Answer 4

. A petty cash fund is a small amount of currency that businesses keep on hand to pay for minor purchases.

Question 5

Collection policy

Answer 5

Of the three principles a business should focus on when extending credit to customers, which one includes monitoring accounts receivable for default payments?

Question 6

Proof of Cash

Question 7

Bank Reconciliation Statement

Answer 7

a document used to compare a business’s internal records to the bank’s records to find discrepancies and make adjustments