Chapter 5: Banking and Checking

A canceled check is one that has been processed by the bank.

• True

• False

Answer explanation

A canceled check is indeed one that has been processed by the bank, meaning it has cleared and the funds have been withdrawn from the payer's account. Therefore, the statement is True.

Floating a check is illegal in most states.

• True

• False

Answer explanation

Floating a check, which means writing a check without sufficient funds in the account, is considered illegal in most states. Therefore, the correct answer is True.

Writing a future date on a check is called postdating.

• True

• False

Answer explanation

True. Writing a future date on a check is indeed referred to as postdating. This practice indicates that the check should not be cashed until the specified date.

Paying bills online is generally considered slower and riskier than writing checks.

• True

• False

Answer explanation

The statement is false because paying bills online is generally faster and more secure than writing checks, which can be lost or delayed in the mail.

When depositing a check into your account, you should write the check’s ABA number on the deposit slip.

• True

• False

Answer explanation

True. When depositing a check, writing the ABA number on the deposit slip helps ensure the check is processed correctly through the banking system.

The column headed by a check mark in a checkbook register is provided so you can make a note of your checks that have bounced.

• True

• False

Answer explanation

The check mark column in a checkbook register is used to indicate which checks have been cleared, not those that have bounced. Therefore, the statement is false.

You should reconcile your checking account as soon as you receive your bank statement.

• True

• False

Answer explanation

True. Reconciling your checking account promptly after receiving your bank statement helps ensure that your records match the bank's, allowing you to identify any discrepancies or errors quickly.

A check cannot be cashed until it has been reconciled.

• True

• False

Answer explanation

The statement is false because a check can be cashed without reconciliation. Reconciliation is a process for ensuring records match, but it is not a prerequisite for cashing a check.

A joint checking account can be opened by two or more people.

• True

• False

Answer explanation

A joint checking account can indeed be opened by two or more people, allowing them to share access and manage funds together. Therefore, the correct answer is True.

A money order can never bounce.

• True

• False

Answer explanation

A money order is a guaranteed form of payment, meaning it is prepaid and cannot bounce like a personal check. Therefore, the statement that a money order can never bounce is true.