Banking Basics Quiz

What is a check?

• A written order to a bank to pay the amount stated to the person or business named on it.

• A type of savings account.

• A loan from the bank.

• A credit card transaction.

What is another name for a checking account?

• Savings account

• Demand deposit

• Fixed deposit

• Recurring deposit

Why is a checking account also called a demand deposit?

• Because the money may be withdrawn at any time.

• Because it earns high interest.

• Because it is a type of loan.

• Because it requires a minimum balance.

What is the first step in the process of a check going through the banking system?

• The bank stamps the back of your check.

• The payee cashes your check.

• Your bank withdraws the money from your account.

• The bank that cashed the check returns it to your bank.

What happens after the bank that cashed the check returns it to your bank?

• The payee cashes your check.

• Your bank stamps the back of your check.

• Your bank withdraws the money from your account.

• A canceled check is a check that has cleared your account.

What does your bank do to indicate that a check has cleared?

• Withdraws the money from your account.

• Returns the check to the payee.

• Stamps the back of your check.

• Sends the check to the other bank.

What is a canceled check?

• A check that has been returned to the payee.

• A check that has been stamped by the bank.

• A check that has cleared your account.

• A check that has been withdrawn from your account.

Why do many banks no longer send paper checks to other banks for processing?

• To make processing faster and more efficient

• To reduce the number of checks processed

• To increase the use of paper checks

• To avoid electronic transactions

What is a substitute check?

• A check that is used to replace a lost check

• An image of the check transmitted electronically

• A check that is used for international transactions

• A check that is used for large transactions only

How can a substitute check be used?

• In the same way as an original check

• Only for electronic transactions

• Only for international transactions

• Only for large transactions