Banking Terms: A-L

Which statement best describes the 50-20-30 Rule?

• 50% to savings, 20% to debt, 30% to necessities

• 50% to necessities, 20% to saving and debt repayment, 30% to flexible spending

• 50% to flexible spending, 20% to necessities, 30% to savings

• 50% to investing, 20% to taxes, 30% to savings

What does an ATM primarily allow a bank account holder to do?

• Borrow money without interest

• Manage account funds such as withdrawing or depositing and viewing balances

• Open new credit lines

• Order checks and deposit slips only

Balance is defined as:

• Total money you owe to the bank

• The amount of money you have in your bank account

• The maximum you can withdraw per day

• Money available after taxes only

Which document shows all transactions related to your account for the month?

• Check register

• Bank statement

• Deposit slip

• Canceled check

A Certificate of Deposit (CD) is best described as:

• A form you fill out to credit money to your account

• A lump-sum deposit that earns interest and is untouched for a predetermined period

• A record of checks written and ATM transactions

• A business that exchanges checks for cash for a fee

Which term refers to a check that has been paid or cleared by the bank and will appear on your bank statement?

• Postdated check

• Canceled check

• Certified check

• Bounced check

What is the main purpose of a check register?

• To order new checks from the bank

• To keep track of checks written, card transactions, deposits, and withdrawals

• To apply for a loan

• To verify your identity at a check cashing store

Compound interest means:

• Interest calculated only on the initial principal

• Interest added to the principal so future interest is earned on both principal and accumulated interest

• Interest paid only at the end of the term

• Interest that applies only to loans

Which statement correctly contrasts credit and debit?

• Credit is a sum of money deducted FROM an account; debit is money deposited INTO an account

• Credit is a sum of money deposited INTO an account; debit is a sum of money deducted FROM an account

• Both credit and debit mean depositing money

• Credit and debit both mean borrowing money

Demand-pull inflation occurs when:

• Production costs increase while demand stays the same

• Supply increases while demand decreases

• Demand increases while supply is the same

• Both supply and demand decrease