Banking Quiz

What is a stop-payment order?

• A request to cancel a check before it is cashed

• A request to increase the credit limit

• A request to open a new account

• A request to change account details

Answer explanation

A stop-payment order is specifically a request to cancel a check before it is cashed, preventing the funds from being withdrawn. This is crucial for stopping unauthorized or lost checks.

What is a certified check?

• A personal check verified by the bank

• A check used for international payments

• A check that cannot be cashed

• A check that is postdated

Answer explanation

A certified check is a personal check that the bank verifies and guarantees, ensuring that the funds are available. This makes it a secure form of payment, unlike the other options listed.

What is the role of a bank statement?

• To provide a summary of account transactions

• To apply for a loan

• To open a new account

• To increase credit limit

Answer explanation

A bank statement provides a summary of account transactions, detailing deposits, withdrawals, and balances over a specific period. This helps account holders track their financial activity.

Who is a payee in banking terms?

• The person to whom a check is written

• The person writing the check

• The bank issuing the check

• The person endorsing the check

Answer explanation

In banking terms, a payee is the person to whom a check is written. This means they are the recipient of the funds, distinguishing them from the check writer, the bank, or the endorser.

Which of the following is NOT a special payment service?

• Cashier’s check

• Certified check

• Money order

• Savings account

Answer explanation

A savings account is a type of deposit account used for saving money, not a special payment service. In contrast, cashier’s checks, certified checks, and money orders are all payment services.

What is a money order?

• A check for any amount

• A payment order for a specific amount payable to a specific payee

• A type of loan

• A form of electronic payment

Answer explanation

A money order is a payment order for a specific amount that is guaranteed and payable to a specific payee, making it a secure method of payment. This distinguishes it from checks, loans, and electronic payments.

What must a customer do to open a checking account?

• Verify identity, fill out forms, and sign a signature card

• Only fill out forms

• Just sign a signature card

• Provide a deposit

Answer explanation

To open a checking account, a customer must verify their identity, fill out the necessary forms, and sign a signature card. This ensures compliance with banking regulations and protects both the bank and the customer.

What is the purpose of a signature on a check?

• To authorize the payment

• To decorate the check

• To provide a personal touch

• To indicate the bank's approval

Answer explanation

The signature on a check serves to authorize the payment, confirming that the account holder approves the transaction. Without a signature, the check is not valid for payment.

What are the six items that must be filled in on a check?

• Date, name of payee, amount of check in numbers, amount of check in words, reason on the Memo line, and signature

• Date, name of payee, amount of check in numbers, bank name, account number, and signature

• Date, name of payee, amount of check in words, bank name, account number, and signature

• Date, name of payee, amount of check in numbers, amount of check in words, bank name, and signature

Answer explanation

The correct choice includes all essential items for a check: the date, name of the payee, amount in numbers, amount in words, a memo line for the reason, and the signature, ensuring clarity and validity.

What is an interest-bearing savings account?

• An account that does not earn interest

• An account that earns interest over time

• An account that charges fees for withdrawals

• An account that requires a minimum balance

Answer explanation

An interest-bearing savings account is specifically designed to earn interest over time, making it a beneficial option for saving money compared to accounts that do not earn interest.